According to expert estimates, over the past quarter century, the cost of 1 ounce of silver relative to 1 ounce of gold has dropped to its minimum values. Experts are trying to figure out whether this dynamic is a precursor of fundamental changes in the market.
In the process of a general slowdown in the global economy, industrial demand for the white metal is declining, and the demand for the yellow metal is increasing. Silver is currently in the weakest position in relation to gold since 1993. Earlier this week, the metal with a gray-silver tint again fell. Since the beginning of the year, this figure fell by 17%. At the same time, the yellow metal also briefly turned out to be in the red, however, due to growth in October, it costs 8% less than at the beginning of the year.
Throughout the year, experts recorded an unexpected peg of the yellow metal to the yuan. This lasted until October 2018. Analysts emphasize that since the victory of Donald Trump in the presidential election in 2016, the price of gold traded in yuan has been more stable than in US dollars. Experts at Goldman Sachs also drew attention to this fact, noting that since November 2016, the export of Swiss gold to China has been sensitive to changes in the yuan. According to experts, due to trade disputes between the United States and China, the sensitivity of the yuan to the yellow metal will continue to be high.
When considering the dynamics of the value of gold and silver, experts suggest that a similar bias of price towards the yellow metal may portend serious changes in the market. However, there is another, more positive, version of what is happening. Analysts remind that silver has always been considered a more volatile asset than gold, and the current decline in the price of white metal can only indicate excessive fluctuations in the course.
