Gold inches higher in early trading; silver outperforms gold over last three months – up 39% to gold’s 16.5%

(USAGOLD – 6/23/2020) – Gold inched higher in quiet overnight and early U.S. trading as investors kept a wary eye on reopening economies around the world and attempted to sort out how the process will play out in financial markets.  Gold is up $3.50 at $1760.  Silver is up 14¢ at $17.93.  Gold has been among the top performers over the past three months, but since late March, when the full effects of the virus began to be felt, silver has outperformed its kindred metal by a wide margin – up 38.9% to gold’s 16.5%.  (On March 20, silver closed trading at $12.59 per ounce. Please see our Chart of the Day)

Goldman Sachs recently revised its twelve-month silver outlook from $15 per troy ounce to $22 per troy ounce. “[C]oordinated global stimulus,” it says in a report highlighted at ZeroHedge, “will help generate growth in industrial production and global economic activity. Relative to gold, silver demand is more closely tied to industrial production, accounting for 50% of its demand. Therefore, as the economy recovers and ‘Fear’ based demand for gold moderates, we expect silver industrial demand to increase, driving up prices. Silver also stands to benefit from growing investment in solar power. Secondly, we have argued in the past that silver is the precious metal of second choice after gold. This means that when interest in precious metals is moderate investors may still add to gold but silver often gets overlooked. However, when interest in precious metals is surging (as it is now) a lot of investors historically diversify part of their gold purchases with silver.” [Emphasis added.]

Chart of the Day

overlay chart showing gold and silver price appreciation over the last three months silver outperformed gold by a wide margin

Chart courtesy of TradingView.com

Chart note; Gold has been among the top performers over the past three months, but since late March, when the full effects of the virus began to be felt, silver has outperformed its kindred metal by a wide margin – up 38.9% to gold’s 16.5%. 

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