Silver prices are on the rise, surging by 26% in March-April and approaching the $30 per ounce milestone. This surge is attributed to the strong performance of gold and copper, as well as increasing investment demand for the precious metal.
Experts are divided on whether silver can maintain this momentum and hit the $30 mark. While some analysts believe that a technical correction is imminent, others argue that the market still has enough momentum to reach this milestone.
Philip Newman, managing director at consultancy Metals Focus, noted that silver is behaving more like a precious metal than an industrial one. This shift in behavior is reflected in the decreasing gold-silver price ratio, indicating silver’s current performance against its historical correlation with gold.
Despite the bullish outlook from some analysts, there is still caution surrounding silver’s rally. The metal is known for its volatility, with a history of sharp price movements. This volatility, coupled with uncertainty in the global economic outlook, especially in the electronics sector, could dampen silver’s upward trajectory.
To sustain a rally above $30, the silver market will need to see a recovery in manufacturing activity and increased demand from sectors like electronics and solar panels. While there are positive signs, such as inflows to physically-backed silver exchange-traded funds (ETFs), these have not yet formed a sustainable trend.
Overall, the future of silver prices remains uncertain, with both bullish and bearish sentiments in the market. Investors will be closely watching for developments in global manufacturing activity and investment demand to gauge silver’s ability to surpass the $30 milestone.
