Gold or silver: Which is best safe haven asset?
With Global economic slowdown and political uncertainty hovering major nations has boosted the demand for safe haven assets like Gold and Silver. The current scenario is such that these precious metals act as trusted asset for one‘s wealth.
With Global economic slowdown and political uncertainty hovering major nations has boosted the demand for safe haven assets like gold and silver. The current scenario is such that these precious metals act as trusted asset for one’s wealth. After Fed and ECB announced the stimulus packages it is widely noticed that commodity prices are on a bull run wherein silver has outshined gold. When it comes to silver prices it has appreciated 23% since April 2012 whereas gold advanced by 14%. This advancement in prices is not only on the basis of the white metal acting as a low beta asset against the global economic turmoil but also industrial demand accelerating.
The important point to note about silver is that the highly speculative moves in the metal by traders have brought it at way distant prices from its fair value. To watch out for is till which levels would this advancement in silver continue and would it ever linger near its all time high price of USD 50.35 per ounce in 1980. Thus to conclude one can say that it is not the prices of gold and silver rising rather, it’s the more and more amount of paper (Currency) been used to buy the same quantity of metal. This hints in the direction of frail buying power of Currency.
The below graph depicts the movement of silver
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