InvestorQ : Why is silver so sharply higher than gold in the year 2020?
Rutuja Nigam made post

Why is silver so sharply higher than gold in the year 2020?

Answer
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Arti Chavan answered.
1 month ago


If you thought that the gold rally has been unbelievable, then you just need to look at silver. In the last 7 months, gold is up about 40% while silver is up over 65%. What is more surprising is that nearly 45% gains came in the last 3 weeks itself. Unlike gold, silver is more of an industrial metal but in the last few months, silver has also been seeing bars demand.

To an extent, the rally in gold and silver has been substantially supported by a weak dollar as a lot of global traders are looking at these two precious metals as a safer currency to store value then the dollar. Even central banks have been gradually shifting to precious metals rather than dollar. Last week, the global spot gold finally crossed the $2000/oz mark.

Silver prices tend to get linked to the price of gold due to the highly popular gold/silver ratio. Hence silver is also supported by firmness in gold. In addition, recovery in industrial sector is also a major positive. Since the gold/silver ratio crossed the 100 mark earlier this year, the frenetic rally in silver has brought down the gold/silver ratio but in the process silver has outperformed gold by a margin.