The price of silver seems to return to close to $ 19 per ounce. Through a pandemic, it fell to $ 11. The current price increase reflects the trend of the waking industry.
Although silver is associated with jewellery, decorations, coins or silverware, thanks to its properties it is widely used in the industry, including: modern technologies, medicine, nanotechnologies, photovoltaics, photography, or automotive.
According to data collected and published by GFMS and Refinitiv, more than half of the produced silver is used in industry. The demand for coins and bars is far the smallest share in the use of this metal. Therefore, silver may be more susceptible to business cycles. Interestingly, one of the industries that have constantly increased the demand for silver in recent years is renewable energy. It is mainly about photovoltaic panels. Here the trend seems very strong and the demand may continue to grow.
Due to pandemics and the freezing of industry in the world, the demand for silver has fallen sharply. The price went down from about 18 to 11 USD per ounce. After this shock, the price started to rise again. Due to the fairly strong price correlation with the industry's economic situation, it is this information that seems to be crucial for trends in this market. Tonight, further data from the Chinese economy were published, which could have improved sentiment in the silver market.
The Caixin Manufacturing PMI rose to 50.7 pts in May 2020 from 49.4 pts the previous month and overcame the market consensus of 49.6 pts. This was the highest PMI reading since January, as the restrictions associated with the coronavirus epidemic were relaxed with production increasing the most since January 2011. The data also shows that business sentiment increased due to hopes for a global economic rebound after the pandemic.
All this seems to help silver prices, which are already approaching 19 dollars an ounce, basically erasing the entire price drop that occurred in connection with the epidemic. In the second half of February, an ounce of silver cost $18.90, now it is $18.35. The rally on silver continues, and only a possible threat for this market is the resumption of restrictions with the second wave of the disease.
Daniel Kostecki, Chief Analyst of Conotoxia Ltd. (Forex Cinkciarz.pl service)
The above comment is not a recommendation within the meaning of the Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes and should not constitute a basis for investment decisions. Neither the author of the study nor Conotoxia Ltd. shall be liable for investment decisions taken on the basis of the information contained in this comment. Copying or reproduction of this study without the written permission of Conotoxia Ltd. is prohibited.
66% of retail investors' accounts record cash losses as a result of trading CFDs with this provider. Consider if you understand how the CFDs work and if you can afford the high risk of losing money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
