In the global market, many events have been directly and indirectly affecting the prices of commodities. Precious metals, such as gold and silver, are no exceptions in this situation. Yesterday, the price of silver rose by 2.5%, i.e. Rs.1,350 per kg, to Rs.55,328 per kg in India leaving everybody awestruck. Today, the price has further surged to Rs.60,400 per kg!
A slight clue was left regarding such a surge as the price had swollen by Rs.1,150 per kg in the previous session. However, the last time silver breached the benchmark of $20 was in September 2016. Now, silver has taken a leap to $20.22, its highest since August 2016.
Industry experts attribute this sudden surge in the price to a probable rebound of traders towards global industrial activities despite the fear of COVID-19. The change in the mood must be the result of growing hope towards the invention of COVID-19 cure, they stated. Besides, gold is considered to have an increased risk appetite at such times, reducing its popularity for an alternative investment.
The price of silver has been consistently rising behind the almost stable price of gold and other industrial metals. The crumbling US Dollar has turned out to be a benefiting factor for commodities. Another major factor contributing to the sudden rise in the silver price is the drop in gold-silver ratio; currently, the ratio stands at level 91, the lowest since February 2020. Investor interest has also been a great support in the rise of the silver price.
On the other hand, there are supply concerns of the precious white metal due to the rising COVID-19 cases in Mexico and Latin America, which have been the native suppliers.
Since the time silver hit a new high of Rs.49,348 per kg this month, gold prices have stayed intermittent over the recent past. The gold price has remained near a nine-year high, expecting some support in the global market. Since gold is considered to be a hedge against rising prices and currency debasement, the prices tend to benefit from the stimulus received from world-wide events.
Here is a comparison of the gold and silver prices over the past year, i.e. from July 2019 until today. The table shows the sudden surge in the silver price, while the gold price has been consistently rising throughout.
|Time Period||Closing Price|
|Silver per kg||Gold per 10g (22ct)|
|21 July 2020||Rs.55,400||Rs.48,100|
|22 July 2020||Rs.60,400||Rs.48,700|
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