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Volatility has been the name of the game in markets for several weeks now, and this has been particularly evident in silver, which has seen impressive downward moves.
Silver, the so-called ‘poor man’s gold’ because of its cheaper price relative to its yellow cousin, was supposed to be a useful hedge in a similar way to gold, but the metal (which also has uses in industry) is beginning to move in a similar fashion to metals such as copper and platinum, rather than with gold. Some of this may be due to liquidations, as investors sold out of their silver holdings to free up cash, but the decline is still very dramatic.
If silver continues to move in tandem with copper and other industrial metals, then there could be more falls in store, since the general outlook for the global economy appears to be one of low growth, as industrial activity slows and consumers remain reluctant to spend.
