Home Gold Knowledge Silver Set to Shine as Gold Holds Steady Amid Market Uncertainty

Silver Set to Shine as Gold Holds Steady Amid Market Uncertainty

by Darren

Amid ongoing economic uncertainty and geopolitical tensions, international prices for gold, silver, and crude oil surged during China’s recent Dragon Boat Festival holiday. While gold prices remain robust, market experts suggest that silver may now offer a more compelling opportunity for investors.

Michele Schneider, Chief Market Strategist at MarketGauge, noted that gold and silver prices have been consolidating recently, prompting her to maintain a neutral outlook on both metals. However, Schneider highlighted that if silver breaks decisively above $34 per ounce, it could trigger a strong buying wave, with prices potentially reaching $40 in the near future.

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At the time of reporting, London silver was quoted at $34.11 per ounce, down 1.7% on the day but still up over 3.4% since Friday’s close. Schneider emphasized patience is key for silver investors, as the sector faces some resistance. She expects that sustained buying after a confirmed breakout would signal the start of a significant rally.

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Silver Gaining Ground Against the Dollar

Despite gold’s recent strength, the rising gold-silver ratio suggests that silver may soon outperform. The ratio, which measures how many ounces of silver equal one ounce of gold, recently dropped below its 50-day moving average, indicating a potential rotation from gold into silver.

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Last month, the ratio hit a five-year peak at 107 amid gold prices reaching an all-time high of $3,500 per ounce. Schneider drew parallels to 2020, when the ratio fell sharply from a historical high to a six-year low within a year, marking a major silver price rally relative to gold.

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Fundamental Drivers Supporting Silver

Schneider cited expectations that the U.S. Federal Reserve will cut interest rates soon in response to a slowing U.S. economy. Lower rates tend to boost industrial demand for silver, as it is widely used in manufacturing and technology, positioning silver as a more inflation-resistant asset compared to gold.

Nonetheless, Schneider reaffirmed gold’s enduring role as a key monetary asset, noting its value is supported by strong central bank demand and the weakening status of the U.S. dollar. This dynamic continues to underpin gold’s appeal as a safe haven amid global uncertainty.

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