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The sharp increase in silver prices in recent times has increased the enthusiasm of investors. From the domestic market to the international commodity exchange, price trends are changing rapidly. Increasing demand, dollar index and global uncertainties have again brought silver into the center of discussion.
New Delhi. There is a huge rise in silver prices across the world. On Friday, silver created a new record and touched the level of $ 59.33 per ounce. This is the second consecutive week when a sharp rise in prices has been seen. Investor demand is so strong that in just four days, silver-backed ETFs have recorded huge inflows, which is considered to be the biggest weekly surge since July.
Heavy pressure on silver supply
The biggest reason for the rise in silver prices is the continuous tightening of supply. According to reports, the 14-day RSI of Silver is hovering around 70, which is generally considered to be the overbought zone. This jump in prices is many times more than that of gold – while gold has increased by 60 percent this year, silver prices have doubled. In the last two months, prices gained further momentum because London witnessed a supply crisis of historic levels. Although there has been some relief now, big markets like China are still facing the lowest inventory levels in 10 years. Experts believe that silver is no longer just a supporting metal to gold, but has become an independent and decisive commodity.
Investor demand increased pace
According to experts, the market is now reacting not just to short-term trading but keeping in mind long-term shortages and industrial demand. The use of silver is continuously increasing in sectors like electronics, medical devices and solar panels, while mining has not increased as fast. The anticipation of a possible rate cut by the Federal Reserve next week is also a major reason for the rise in prices. Low interest rates generally make precious metals stronger because they do not pay interest. Analysts estimate that if the same conditions continue, silver may reach $ 62 an ounce in three months.
Industrial and investment demand combined to create record prices
Silver is an important metal not only for investment but also for industries. For the past five years, global demand has remained greater than mine supply, leading to a deepening physical shortage in the market. This week, silver registered an increase of 4.5 percent, whereas last week it had increased by 13 percent. Gold, platinum and palladium have also moved higher, while the dollar index has weakened slightly. Market experts say that as long as demand at both the industry and investment levels is strong and global supply remains weak, silver prices can continue to record new highs.
