Are silver and platinum the metals to watch?
As it remains a critical monetary asset in global financial markets, Gold continues to receive considerable attention. Though, all the excitement this week was in silver and platinum. Silver is trading at its highest level in 13 years, analysts say the break above $35 an ounce is noteworthy.
Awareness in silver has been growing steadily for a month, from the time when gold hit a record high above $3,500 an ounce, pushing the gold/silver ratio to an 11-year high above 100. According to analysts silver has been undervalued compared to gold for several years.
Gold has outperformed silver during times of economic uncertainty and geopolitical chaos, which have driven safe-haven demand. Record central bank demand over the last three years has provided solid support for gold as a monetary metal. Silver, instead, has been left behind because: central banks don’t buy silver.
Nevertheless, markets are finally beginning to see value in silver, as industrial demand continues to drive significant supply deficits. Due to its industrial consumption, silver is actually a better inflation hedge than gold. The growing solar power sector is currently the biggest driver of silver demand. According to the Silver Institute, nearly 196 tonnes of silver will be used in photovoltaic solar panels this year.
The second-largest segment of the silver market is jewelry, which is expected to consume 196 tonnes of the metal.
Platinum is set to end the week with a nearly 12% gain, with prices firmly above $1,150 an ounce. The industrial metal prices are now trading at a three-year high and are experiencing their biggest rally since July 2020.
Platinum is also viewed as a value play, driven by strong fundamentals and growing industrial demand, which continues to create supply deficits. Platinum is a critical metal in the automotive sector, which accounts for about 80% of global demand. It is used in autocatalytic converters, which help reduce harmful emissions from internal combustion engines.
