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News Article

Price of Silver and Gold Decline as Dollar Continues to Advance

By Lorenzo Núñez | Thu, 09/30/2021 - 09:16

Price of Silver and Gold continue to decline as the US dollar reaches a 10-month high price, reducing the appeal of precious metals for foreign currency investors.

Silver has reached its lowest price in a year, falling 4.3 percent to US$21.50 per ounce, its lowest point since July of 2020. Meanwhile, Gold has also lost some ground, with spot gold down 0.5 percent to US$1,726.09 an ounce, nearly a two-month low.

Both precious metals find themselves under pressure this year as more central banks start signaling a pullback in stimulus measures used to cushion the economic impact of the pandemic.

“We continue to expect silver to underperform gold on a risk-adjusted basis, as a normalization in industrial demand further weighs on the white metal, while flow effects from tapering quantitative easing QE should also weigh on silver,” TD Securities analysts led by Bart Melek said in a Bloomberg note.

In the past, industry leaders were adamant on the importance of silver in future development for other industries which would eventually increase its price. “Silver is really getting a new kind of reputation for being a green metal. There is optimism for a major economic recovery, meaning that silver will benefit from the ongoing bull run in the industrial metals complex. The silver use for these technologies cannot be replaced because it has the best conductivity performance of any metal” said Taj Singh President, CEO and Director of Discovery Silver in an interview with MBN. Silver is expected to be the metal that will benefit the most from emerging industrial applications. In the Market Trend Report of the Silver Institute, it was reported that silver has the highest electrical and thermal conductivity of all metals, making it an essential industrial metal, reported by MBN.

Despite the drop, Gold remains as a safe haven to investors despite its slow down. “In 2020, Gold climbed to an all-time high after the impact of the pandemic and the ensuing global economic crisis. Investors considered gold a safe haven to hide from all the uncertainty” said Imaru Casanova Deputy Portfolio Manager and Senior Gold Analyst at VanEck in an interview with MBN.  “From an investment perspective, we think silver will follow gold’s lead, as both metals are used by investors as a safe haven and hedge against inflation. In addition, silver has a strong industrial demand component, which should grow during periods of global economic growth,” said Casanova.  

The data used in this article was sourced from:  
MBN, Bloomberg
Photo by:   QuinceCreative
Lorenzo Núñez Lorenzo Núñez Junior Journalist & Industry Analyst