In a note released Friday Hansen said, “Silver’s dual role as both a precious and industrial metal means its price is influenced by gold, industrial metals and the dollar.”
Silver prices hit a recent high in May, reaching $32.50, but opened trading around the $31.35 mark on Friday.
“Between May and August, the gold-to-silver ratio widened from 73 ounces of silver per ounce of gold to 90 ounces,” Hasen said.
Recent reports show China’s demand for gold may be weakening, while its industrial demand for silver has skyrocketed due to its use in solar panels. The Chinese dominate the solar market.
“Investors cautious about paying record-high prices for gold may see better value in silver, which remains well below its 2011 record of $50.
Year to date, gold prices have risen more than 25% and silver has spiked close to 30%.
The May rally ending
After silver reached its high of the year in May, it sold off relatively quickly before a reinvigorated rally began in August.
“In May, silver experienced a deep correction alongside industrial metals due to concerns about Chinese demand,” Hansen wrote.
However, recent news has shown an increase in Asian demand for silver.
Silver demand has exceeded silver supply for three consecutive years and is on pace to continue that trend in 2024.
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