Gold price has so far reached its all-time high after crossing $2,000 level easily. Despite the fast rally, analysts anticipate silver price to outperform it.
Precious metals led by Gold and Silver are largely dominating 2020 best performers. Gold price has scaled to new heights after breaking out of 2011 ATH around $1922 per OZ. At the time of reporting, the instrument was trading around $2034 per OZ.
Gold is largely regarded as a safe haven and a hedge factor against falling economies. With the world struggling to fight the ongoing coronavirus and the recent Lebanon tragedy that devastated humanity at large, investors might be rushing for precious metals due to lack of future certainties. 2020 has been full of many surprises and anything seems possible at the moment, hence risk takers are less than other times in the global economy.
Gold price has been largely bolstered by central banks from all over the world stashing pure gold in bulk. Struggling but rising markets like India have for long considered gold instead of fiat due to the high fiat inflation rate. Having broken out its all time high, the metal is likely to soar up as the demand continue rising by the day.
Gold Price in Comparison to Silver Price
According to Marketwatch metrics, Gold continuous contract is up 35.64% in the past year, up 35.03% YTD, added 21.73% in the past three months, up 12.91% in the past one month, and up 4.48% in the past five days. However, comparing gold price with that of silver, the latter has risen more in the same period. Despite not having broken out of its all time high, analysts predict it will rise higher than Gold price as its demand increases with market reopening.
Silver continuous contract, which was up 2.93% at the time of publication, has risen 56.35% in the last one year, added 49.58% YTD, up 79.16% in the past three months, up 39.93% in the last one month, and 9.69% in the past five days. Michael Hsueh, commodities and foreign exchange strategist at Deutsche Bank, said he expects the silver price to outperform the gold price in the near future. According to him, the world economy is set to bounce back, and that will drive up industrial consumption. As a result, it is set to increase the demand for silver, which has many industrial uses. Hsueh stated:
“Silver … has a much higher industrial component to it. So, a much higher component of silver supply demand in industrial consumption. And in an environment where we see the global economy recovering, that’s another reason to buy silver”.
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