Silver Playing Catch-up As Prices Outperform Gold Prices
While investors are taking profits in gold as prices hovers near a five-month high, they are starting to dip their toes back into the silver market as copper hold critical support. March Comex high grade copper futures are up more than 1% on the day, last trading at $1.276 a pound.
That optimism is helping silver prices beat gold in the near-term. March silver futures last traded at $14.65 an ounce, up 0.31% on the day; meanwhile February gold futures last traded at $1,247.80 an ounce, down 0.13% on the day.
“It appears that copper continues to build a solid base and there is optimism that the world economy is at least stabilizing,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “That could be seen as a positive for silver.”
George Gero, managing director with RBC Wealth Management also sees potential for silver as sentiment surrounding global growth slowly improves.
“Silver has been oversold for a long time and is playing catch up,” he said. “Silver has plenty of room to grow.”
However, silver’s industrial component is only one part of the metal’s demand picture. Other analysts have noted that gold’s recent recovery is another bullish factor for the grey metal.
“If you are bullish on gold then you should be bullish on silver,” said Bill Baruch, president of Blue Line Futures.
Baruch added that although gold face some difficult resistance at $1,250 an ounce level, the entire precious metals complex could benefit from dovish sentiment after next week’s Federal Reserve Monetary policy meeting.
“You just have to be patient. We think gold prices will rally through to the end of the year and we see any weakness in gold and silver as a buying opportunity,” he said. “As gold rallies, investors could expect to see silver outperform the yellow metal.”