Silver’s Relation to Gold is Dragging it Down

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While makers of everything from jewelry to solar panels are buying the most silver in nine years, prices are languishing. Investors are dismissing industrial demand and instead focusing on the waning appeal of precious metals as a haven, with the Federal Reserve paring economic stimulus measures, inflation muted and equities rallying.

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Bloomberg News says silver has been dragged down by a yearlong slump in gold, the commodity most widely held by investors in exchange-traded funds. Following a decade-long rally that saw prices for both surge more than sixfold. The five most-accurate precious-metals analysts tracked by Bloomberg over the past two years predict silver will average $18.80 an ounce in the third quarter, the lowest since 2010, and gold will drop 7.3 percent.

On Thursday, May 1, the day’s biggest mover was the price of Japanese silver, which saw a 3.1 percent decline to JPY 628.00 ($6.14) per 10 grams. Indian silver prices inched up 2.3 percent to INR 43,586 ($723.11) per kilogram. At $19.14 per ounce, US silver fell 1.5 percent yesterday. At CNY 4,095 ($654.25) per kilogram, the price of Chinese silver was essentially unchanged.

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The price of Japanese gold bullion declined 1.0 percent to JPY 4,236 ($41.44) per gram. Indian gold bullion prices saw a 0.5 percent decline to INR 28,159 ($467.17) per 10 grams. US gold bullion closed 0.4 percent lower at $1,291 per ounce. Chinese gold bullion saw little change in its price on Thursday at CNY 260.55 ($41.63) per gram.

Japanese platinum bar finished the day down 0.5 percent to JPY 4,685 ($45.83) per gram. The price of US platinum bar fell 0.3 percent to $1,420 per ounce. The price of Chinese platinum bar held steady at CNY 305.00 ($48.73) per gram.

US palladium bar gained 0.4 percent to finish at $807.00 per ounce. The price of Japanese palladium bar rose by 0.1 percent to JPY 2,630 ($25.73) yesterday after remaining flat for two days. Chinese palladium bar held its value on Thursday at CNY 181.00 ($28.92) per gram.

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