Silver prices, along with related exchange traded funds, are outshining gold as uncertainty fuels safe-haven investments, but industrial activity could help silver keep up its momentum.
Precious metals are strengthening as a safe-store of value, with Congress deadlocked over extending the country’s debt limit to avoid a default.
“Gold is getting some bids because of the uncertainty,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a Bloomberg article. “It will be a very big deal if the U.S. defaults.”
Gold futures were up 1.1% Monday, trading around $1,324.6 per ounce. Silver futures were up 2.7%, trading around $22.35 per ounce. [Gold ETFs Pick Up After Touching Two-Month Low]
However, over the mid-term, silver could outperform gold as the U.S. monetary policy normalizes, Shanghai Metals Market reports.
According to Bank of America Merrill Lynch, gold will weaken along with a gradual rise in interest rates, with bullion hovering around $1,300 per ounce in the fourth quarter and dropping to $1,294 an ounce next year.
The bank, though, anticipates silver prices to average $26.38 an ounce due to increased economic activity, which would support silver for industrial applications.
iShares Silver Trust
For more information on gold or silver, visit our precious metals category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD and SLV.