Silver hits it highest level in 13-years on weaker USD and solid demand says experts
"With the trust in dollar decreasing silver appears to be a good avenue for money to move to and the Gold Silver ratio was recently above 1.10 so the only way forward was either silver prices rise up or gold prices fall, and thats what has happened silver has risen far more than gold," said Mrinesh Jain Director, Bombay Bullion Metal Hub LLP.
The gold-silver ratio, which shows how many ounces of silver are equivalent to one ounce of gold, helps the market assess future trends by reflecting how silver is performing in comparison to its historical relationship with gold.
As reported by Reuters, the dollar prices fell across the board after weaker-than-expected U.S. private payrolls numbers highlighted continued easing in the labor market and data showed the U.S. services sector contracted for the first time in about a year in May.
Silver typically moves inversely to the US dollar, when the dollar strengthens, silver prices fall, and when it weakens, silver tends to rise.
Additionally, Silver is vital in industries which used in electronics, solar panels, EVs, medical devices, water purification, catalysts, mirrors, and semiconductors due to due to its top electrical, thermal, and antibacterial properties. With rising demand from clean energy and advanced tech, silver is becoming increasingly important beyond traditional uses like jewelry and coins. This can be seen as one of the factors behind the rise.
On the geopoltical front, in a significant move invoking national security concerns, US President Donald J. Trump has announced a visa ban for international students planning to begin studies at Harvard University. Trump has also signed an order which imposes travel restrictions on nationals from 19 countries to the US, citing national security risks, according to the White House.
Silver gains on safe-haven demand during economic and geopolitical uncertainty, similar to gold.
"While silver is well-positioned to test further highs--possibly reaching Rs 1,30,000 per kilogram later this year," said Ajay Kedia, director at Kedia Commodities, Mumbai. Adding, "silver continues to reflect the dual narrative of a monetary hedge and an industrial growth story."
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