As the price has surged dramatically, we have focused a lot on gold over the last few months – however, we haven’t forgotten about our other old friend: silver. The precious metal has also had an eventful year so far, and has also been heavily traded during the COVID-19 pandemic, but what’s to come for silver in the near future?
Silver’s 2020 so far
Silver began this year at just over £13.52 per ounce. As its sibling gold began to rally when UK lockdowns took hold in March, silver appeared to dip in price and headed down to as low as £10.59. April and early May saw the price appear to hover around the low-to-mid £12 mark, however, late May saw the precious metal begin to bounce back again - hitting £14 an ounce.
The month of July saw the price of silver shoot up by around 35 percent, spiking at over £19.80 at one point, leading some financial analysts to ask: could silver be making a comeback?
While the intensity of the rally in silver cooled a little last week, some are predicting that there could possibly be more gains ahead.
The comeback kid?
The recent rally in silver has been helped by supply disruptions, with many mines having to close as a result of the COVID-19 pandemic. Driven by supply and demand, silver is widely seen as the most volatile of the precious metals. A very versatile metal with many uses, it can be used in chemical engineering, the production of medicines, and many electronic technology-based applications. As these sectors begin to recover after the coronavirus pandemic, we will no doubt see demand for silver rise and mines having to work hard to catch up.
The recent weakening of the US dollar and the global economic issues due to the pandemic is also impacting the price, as silver becomes an attractive investment prospect. As we stated last week, the dollar fell over 4% against the pound last month, coinciding with huge spikes in coronavirus cases in many US states. This is currently making hard assets like gold and silver more appealing to investors looking for a safe haven in which to protect their wealth. As gold continues to rise in price, the comparatively low price of silver could see growing numbers of investors make a return to silver.
With some mines remaining closed or reducing their production, silver supply issues may continue. With industrial demand only looking to be growing after lockdowns end, as well as greater investment interest, will we soon see silver soar?
This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.