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July 18, 2024
PI Global Investments
Silver

Gold Price Soars to New Record, But Silver Price Gains Outpace Gold


(Yicai) March 13 — The international silver price surged 7.8 percent yesterday from the start of the month, growing at a faster rate than that of gold which soared to an all-time high that day, as the precious metal that is widely used in industry remains in short supply.

Silver prices reached USD24.86 an ounce on the Comex in the New York Mercantile Exchange yesterday, while that of gold soared 6 percent from March 1 to hit a new record of USD2,203 and is now trading around USD2,200 an ounce.

There will be a continued shortfall in the supply of silver this year for the fourth year running, due to strong demand for the metal in industry, but the supply-demand gap will narrow to 5,474 tons from 6,034 tons last year, the Silver Institute said.

The price of silver is determined by its dual properties as a precious metal and its many industrial applications.

The international silver price has been hovering around USD20 and USD21 an ounce, Zhan Dapeng, research director of Everbright Futures Nonferrous Metals, said previously. The price in China is showing a definite upward tendency and could outperform the overseas market.

The new all-time high of gold prices might propel the price of silver up too, Zhan said. However, although the pricing of silver and gold tends to be closely linked, the correlation between the two has weakened in recent years.

More Rate Cuts

The rapid gains in precious metals’ pricing recently is strongly connected with the US economic situation and the expectation of more interest rate cuts by the US Federal Reserve, said Tang Lingzhen, a precious metals researcher at Holly Futures.

The US’ jobless rate was still higher than forecast in February, even though the number of newly employed people beat expectations, according to the latest data released by the US Department of Labor. This led to big fluctuations in asset prices in a short period.

And prices look likely to continue to rise as more interest rate cuts by the Fed loom, and now that people are no longer looking forward to rate cuts, said Huishang Futures precious metals analyst Cong Shanshan.

However, the Fed’s Chairman Jerome Powell will give the semi-annual monetary policy report in Congress this week and the February non-farm payrolls report will be released by the US Department of Labor, so investors should beware of a possible sharp correction in the pricing of precious metals, she said.

Editor: Kim Taylor



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