Silver is set to outshine gold
August 05, 2020 @ 09:55 +03:00
Silver is set to outshine gold, even as prices of both precious metals soar in the midst of a faltering global economy and a weakening U.S. dollar. This year, gold prices have shot to record highs not seen since September 2011. Investors have been fleeing to “safe haven” assets as the pandemic shows no signs of abating.
Gold prices hit a new record close of $2,021 per ounce overnight — settling above $2,000 for the first time. It was last trading at $2,020.30. Geopolitical unrest overnight likely added to the spike. The blasts in Beirut, which killed dozens and wounded thousands, “probably (added) to the shine of Gold above $2020,” said a note from Mizuho Bank.
Spot gold prices have spiked more than 32% so far this year and are on track for the best year since 1979. Meanwhile, silver prices have also followed suit, shooting up more than 30% year to date.
Analysts at the bank said markets are pricing in the potential for more demand for silver, if Joe Biden wins the U.S. presidential elections and delivers his green infrastructure plan.
Under Biden’s plan, commuter trains, buses and passenger vehicles will run on electricity or clean fuel, and clean light rail and bus systems will be developed. In addition, the plan includes offering incentives to upgrade housing and commercial buildings to make them more resistant to extreme weather.
Gold prices and the greenback have an inverse relationship. As the U.S. dollar has been falling against other currencies, the precious metal will become cheaper in other currencies, in turn spurring demand for gold and causing prices to go up.
Gold just hit a fresh record high — but some say silver is set to overtake, CNBC, Aug 5