Gold and Silver bullish run stalled on Friday as better than expected jobs data in the U.S resulted in the strengthening of the dollar. However, the two precious metals ended the week near record highs as traders remained bullish in response to developments around the world.
Gold-Silver Rally
Gold has already recorded a new record high of $2089 as investors continue to bet on it as a safe-haven. The SPDR Gold Shares exchange-traded fund, which tracks the price of gold, is up by more than 34% for the year, affirming bullish momentum on the bullion.
Silver, on its part, clocked a new high of $29.915 as it benefited from the strong demand for the precious metal in the market. The iShares Silver Trust, which tracks silver prices, 57% alludes to the bullish bias on Silver compared to a 4% gain of the SPDR S&P 500 ETF, which tracks the S&P 500 index.
Gold prices have continued to edge higher even on production round the world edging higher Production level increased in the second quarter benefiting from the fact that mines remain dispersed across the globe, thus allowing for hedging for risk.
In contrast, silver production shrunk in the quarter by nearly half. Silver production shrunk in part because most silver mines are in Latin America. The region has been hard hit by the COVID-19 pandemic resulting in the shutdown of mining operations.
Gold vs. Silver Investment
While gold and silver don’t pay dividends as investments, both differ a great deal, which makes one of the metals suitable for some portfolios. For starters, Gold is the most liquid of the two and the largest in terms of value given its annual supply. Higher liquidity means it is much easier to trade in and out of gold than silver. In 2019, gold’s value stood at about $24.5 trillion more than five times silver’s $4.4 trillion.
When it comes to volatility, silver is more volatile than gold. Volatility can be good or bad, depending on how an investor leverages it. For traders looking to make quick money on wild price swings, then silver would be an ideal pick.
