Reasons for the Surge in Silver Prices
Recently, silver experienced a significant surge in value during trading, witnessing a price increase of up to 7%. Unlike gold, silver tends to be less stable and more prone to price fluctuations. Nevertheless, due to a series of favorable circumstances leading to a more optimistic investment outlook, interest in silver has been on the rise.
Jeffrey Halley, a senior market analyst at OANDA, pointed out two factors driving the surge in silver trading. He mentioned that silver, often referred to as the “poor man’s precious metal,” is benefiting from the same positive market conditions that have been propelling gold prices due to negative real yields across the US yield curve. Additionally, silver’s industrial applications are contributing to its growth, especially in the current environment characterized by a global push for reflation and increased investment activity.
In the current market environment, assuming no major setbacks occur, silver is expected to maintain its upward momentum. However, this momentum will rely on ongoing collaboration among the market participants, the energy sector, and the commodities sector.
Edward Moya, another senior market analyst at OANDA, highlighted the strong industrial demand for silver driven by the reopening of economies. With silver surpassing the $20 mark, bullish sentiment is likely to prevail until it approaches the $22.50 level.
Analysts speculate that the recent announcement by the European Union about an $860 billion recovery package, emphasizing investments in green and digital sectors, may have contributed to the boost in silver prices. Moreover, positive news on COVID-19 vaccine progress from companies like Pfizer, AstraZeneca, and Moderna has added to the overall positive market sentiment this week.
