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Silver soars to one-year high amid US dollar slump

Silver’s value soared to a one-year high this week, as the US Dollar Slump strengthened Precious Metals.

America’s economy appeared to be on the right track at the end of 2015, with the Federal Reserve deciding to raise interest rates for the first time in almost a decade. In response, precious Metal values plunged; the assets are a popular alternative investment during times of financial uncertainty, but also are denominated in US dollars, which means that when the currency is weaker, demand from overseas investors increases.

As 2016 has unfolded, though, that initial confidence has weakened – US GDP edged up 0.5 per cnet in the first quarter, the slowest quarterly pace since Q1 2014 and below the 0.7 per Cent forecast.

This week, the Federal Reserve announecd that it would delay an interest rate hike once again, reinforcing the lack of positive sentiment. As a result, the dollar dropped by 0.65 per cent on Wednesday 27th April, reports Bloomberg, while the Japanese yen led increases against the currency.

“The Gold market saw renewed buying interest Thursday with weak first quarter US GDP data and a lack of fresh monetary stimulus in Japan combining to soften the dollar and lift the precious metals complex,” reports The Bullion Desk.

Gold for June delivery on the Comex division of the New York Mercantile Exchange rose $15.90 or 1.3 per cent to $1,266.30 per ounce.

Silver, though, has soared even higher, thanks to the boost of China’s stabilising economy, which is expected to strengthen the usage of the metal in such products as electronics and solar panels.

“The main difference between gold and silver is that silver has substantially more industrial applications than gold,” Georgette Boele, coordinator FX and precious metals strategist at ABN AMRO, tells Forbes. “When the overall outlook on China became less negative as Chinese data stabilised, the industrial demand outlook for platinum, palladium and silver improved.”

Photo: Sirqitous

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Silver soars to one-year high amid US dollar slump


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