The recent worries over global economic downturn and accommodative Fed policy raised the prospects for higher Silver prices.
Precious metal complex continued to rally last week with both Gold and Silver prices gaining 1.58% and 1.8% respectively. Precious metal prices has benefited the most from dovish US Fed policy and weakening dollar along with dimming economic outlook.
Industrial metal prices traded positively last week with Nickel being the best performer rising 3% while Lead and Aluminum ending the week unchanged. Base metals complex tracked optimism on progress over US-China trade meeting with the Chinese New year holiday starting from 4-10 February 2019.
Energy complex showed a mixed performance with Crude oil rising 1% while Natural gas prices fell 1.5% last week. Crude oil prices gained traction after OPEC started to curb its oil production sooner than planned in a hurry to bring the market back into balance. While, Natural gas prices weakened on forecasts of warmer weather in US during the winter season slowing the demand for gas.
Silver prices gained almost 14% in the span of just two months trading steady above USD 15.9 per oz after the Fed confirmed no immediate rate hikes to happen, triggering the dollar and US yields lower.
Also the dimming economic outlook is supporting the safe haven asset prices. Silver prices gained traction from Gold’s strong performance since last three months. Investor’s increasing Gold and Silver ETF holding and the huge buying from the central banks to diversify from dollar assets continued the upside trend in prices. Looking at the Gold-Silver ratio, silver is set to witness strong rally as the ratio stands at 82.60 favoring silver prices more over gold prices.
The recent worries over global economic downturn and accommodative Fed policy raised the prospects for higher Silver prices. MCX Silver prices should remain positive and trade towards Rs 42,000 per kg from the current market price of Rs 40,600 per kg in the next three months.
(The author is Commodity Analyst at Narnolia Financial Advisors )Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.The Great Diwali Discount!
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