Silver Price: Silver remains the precious metal to watch as gold price pushing to $1,900 - Metals Focus
(Kitco News) - The gold market is attracting a lot of attention as prices push back above $1,900 for the first time this year; however, one research firm reiterated its call that investors should continue to keep an eye on silver.
In a report published Tuesday, analysts at Metal Focus said they expect silver prices to continue to outperform gold through 2021.
The comments come as the gold market has enjoyed a two-month rally as investors look for a hedge against the growing inflation threat in a low-interest-rate environment. The shifting dynamic in the precious metals space has pushed the gold:silver ratio to around 70 points.
June gold futures last traded at $1,904.30 an ounce, up 0.33% on the day. Meanwhile, July silver prices last traded at $27.98 an ounce, down 0.25% on the day.
The U.K.-based research firm noted that silver prices have lagged in recent weeks as copper prices have fallen from their record highs above $10,000 per tonne. However, the analysts added that silver continues to enjoy the best of both worlds as both industrial demand and investment demand remain strong.
'In spite of growing concerns about new variants of the virus, ongoing fiscal and monetary stimulus measures will help to support economic growth and so continue to benefit industrial commodities," the analysts said in the report. 'These accommodative measures and their impact on economic growth raise the prospect of growing inflationary pressures. This, in turn, points to real interest rates remaining depressed, which will be supportive of investment in both gold and silver."
The analysts noted that investment demand remains robust. Global holding in silver-backed exchange-traded products remains close to record levels, the analysts said. The research firm also noted that physical bullion demand reached record levels in the first quarter of this year, rising 43% compared to last year.
Looking at silver's industrial market, the analysts said that the precious metal would continue to benefit from the growing momentum in the development of green energy technology.
'Metals Focus expects the gold price to strengthen over the course of this year. Against this backdrop, given the smaller size of the silver market, silver should outperform to the upside. We, therefore, expect the gold:silver ratio to ease back into the low 60s during H2.21," the analysts said.