After seven years of a continuing process, silver prices have reached its highest level amid a recovering economy.
The element has surged over 18% this week, striking a high of $23.24 an ounce. That is an increase of 28% this year.
Meanwhile, gold prices have set a new record, reaching above $2,000 for the first time. It is equivalent to almost $2,021 per ounce overnight.
According to Naylor-Leyland, manager of Merian Gold & Silver Fund, in his interview with Morningstar, gold prices have soared more than the dollar currency. Its worth surpassed the statistics nine years ago.
But the key here is that their operating environment beyond that is exceptionally bullish due to meager prices. Weak commodity currencies, so you pay workers generally in the FX line which you’re mining.Naylor-Leyland, Manager, Merian Gold & Silver Fund
While both metals have surged its value, Naylor-Leyland and other analytics anticipated that silver might continue to transcend over gold prices.
He added that bull market cycles see a strong double-digit annual performance for gold and that silver will do a multiple of that.
He also mentioned that it had lagged the moved more often than before, as the capital seeks out for gold and mining areas tend to percolate under. The silver element being the material to capture through the following terms is expected.
He emphasized that there are plenty of upsides for gold and silver and that silver will continue to outshine even gold.
The increasing demand for usage of silver in health care applications, industrial organizations, and mostly in electronic elements for 5G telecommunications networks have contributed so much to the immediate ascending of purchasing the aspect.
Silver has a much higher industrial component to it. So, a much higher component of silver supply-demand in industrial consumption.Michael Hsueh, commodities and foreign exchange strategist at Deutsche Bank
As reported by CNN, half of all demand for silver comes from industrial buyers since silver is an essential component in electrical tools and other tech-related services.
Analysts emphasized that the gearing up of the market rollback would lead to higher need and purchase for industrial components, which comes with the silver element. “And in an environment where we see the global economy recovering, that’s another reason to buy silver,” Hsueh noted.
The silver metal would sell cheaper in other currencies as the U.S. dollars have been experiencing downgrade compared to other currencies.