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Does the recent volatility in silver prices signal an investment opportunity?

*The Wall Street Journal, by Rhiannon Hoyle & Alistair MacDonald, July 5, 2016

”The price of silver surged to a two-year high on Monday as investors sought havens while buyers in China made bold bets in the futures market and scooped up vast volumes of physical metal.”

”Investors have also jumped at silver as a haven asset. In the wake of the Brexit referendum, though gold got all the media attention, it has been silver seeing more of the investors. Since the Brexit vote on June 23, gold is up 7% on the New York Mercantile Exchange and silver has risen 17%.”

”Historically, silver has generally moved higher than gold when both prices climb and sunk further when they fall.

‘It is more volatile, it tends to swing around a lot more’ than gold, said Simona Gambarini, an economist at Capital Economics.”

”More so than gold, silver has industrial uses, as a component in electronics, solar panels and other products. About half of all silver purchased is used in industrial contexts and the rest is turned into bars, coins, silverware and jewelry.

Ms. Gambarini believes silver’s outperformance will continue because she anticipates the U.S. and Chinese economies will perform better than expected.

Adding to this, after 10 years of supply increases, silver supply is set to fall by a couple of percentage points, she said.

Spot silver has risen more than 50% since posting a 5-1/2-year low in December, when prices were dragged down by expectations of rising rates in the U.S. and a slowdown in China.”

*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.