As the world’s top investment manager and financial market journalist, I bring you the latest news on the silver market. According to Commerzbank’s Carsten Fritsch, silver has been facing intense pressure, even more so than gold.
Silver Price Drops by 8% in a Week
Since last Wednesday, the price of silver has plummeted by around 8%, now trading at less than $29 per troy ounce. This is its lowest level since June, leading to a Gold/Silver ratio of 83, a level not seen since May. Silver typically follows gold’s price movements, but recently, this correlation has only been seen on the downside.
Despite a recent increase in gold prices following US inflation figures, silver did not follow suit, causing the Gold/Silver ratio to rise even before the price drop. The weakness in silver can be attributed to the overall weakness in base metals.
This year, industrial applications are expected to make up nearly 60% of silver demand, with a significant portion coming from photovoltaics. Despite this, the negative price reaction in silver seems excessive.
Analysis: What Does This Mean for You?
For the average investor, the recent drop in silver prices may signal a buying opportunity, especially considering its industrial applications and potential for growth in the future. Keep an eye on the Gold/Silver ratio as an indicator of market sentiment and consider diversifying your portfolio to include silver investments.