- Silver Rallies 5.3%
- Strengthened Dollar Curtails Silver Gains
- Silver Experiencing Low Industrial Demand
Silver (XAG/USD) prices continue to edge higher after three days of price gains. The rally has come at the backdrop of strong demand for precious metals amidst the looming economic recession triggered by COVID 19 pandemic.
Silver Price Gain
In early Tuesday trading session, Silver was up by more than 0.62% to trade at $15.777 season highs of $15.848. However, prices have so far remained subdued in a tight trading range of between $15.557 and $15.848. With metal trading in a strong uptrend, it has ended up gaining more than 5.6% since the start of the month. In March, Silver was up by more than 5.3%, clocking monthly highs of $15.980 and lows of $14.7862.
Silver has so far underperformed Gold (XAU/USD) another precious metal sending shockwaves in the market. While Gold prices have rallied by more than 10%, Silver prices are down by 15% for the year, in what can be attributed to the strengthening of the dollar.
Further gains in silver prices could experience strong resistance given that industrial demand for the metal is still low. Lockdowns around the world designed to curb coronavirus has disrupted industrial activity leading to a decline in demand for silver. However, Silver is also expected to register substantial gains after a recent bounce back from one-year lows.
The greenback has continued to strengthen as traders are betting on it as a safe-haven despite weak economic data in the U.S. A strengthened dollar is a bearish catalyst for Silver as it makes it more expensive.
Gold is expected to continue outperforming Silver as traders are betting on it as a safe-haven as is the case with the greenback. The looming economic crisis has forced traders to a safe haven to store wealth.