Silver showing small Ebbs now but Tided Soon
Mexico, Peru and China are the major producers of silver
shown by various surveys and China itself is the second largest consumer of the
commodity too. And the silver trading in the largest spot market of China did
not show good signs in the year; the major reason being said behind this is the
decrease in the industrial use of the metal. It is unforgettable that silver is
the best performing precious metal in the basket this year even though many
investors seek hedging against it.
The ebbs in China, though considerable, is not getting the
whole concern as it is not due to the global recession but it is the China’s
economy which has slowed down long, for seven quarters now. More than 65
percent of the silver demand is its industrial use in photography, solar and
electrical appliances; earlier years, the demand aggravated by 5 to 7 percent
but the declines are only recorded in recent years. This scenario in China will
definitely affect the overall trading scenario as it may get viral which is a
basic phenomenon of the economy.
We discussed yesterday how gold is attributing to the
current situation, it is going up well. No need to mention that gold leads the
group of precious metals and generally, other metals like silver and copper
usually flow the trend of gold. In the current scenario, monetary easing,
rising inflation expectations and persistent super-low interest rates have
weakened the currency whereas strengthened the gold. For the economic safety,
there is also a robust investment demand. This is the reason why gold is
attracting lots of investment and is being by the silver as it is affordable by
larger number of people. No wonder, silver has been known as the most volatile
of the precious metals but this volatility also increases the probability of
opportunistic investment.
Comments
Post a Comment