Silver enjoyed a spectacular rally of 21.5% in the second quarter after a gain of 11.3% in the first and thus became the star performer in the category of precious metals. Silver enjoyed such gains in the prices primarily due to a strong rebound in speculative and investor demand. The outperformance of silver is expected to continue in the fourth quarter as well as in 2017.
Some market experts expect silver to witness a weaker industrial demand in the fourth quarter but the others are sure that silver will definitely shine in the next few months and all this because of a cautious Fed.
In continuation with the above expectations, silver rose to great heights with the fresh start of 2016 and went even high in the second quarter due to stronger interest of the investors and speculative demand amidst macro demand for precious metals. Silver also outperformed gold because the gold-silver ratio was historically too high. Silver might continue to perform better than gold in the fourth quarter as the investors assume the Fed to continue on hold and not change the market’s expectations about rate rises due to the uncertainty about the US outlook after recent disappointing data. As similar to that of gold, silver prices went somehow low in the end of the third quarter but not it is set to surprise the market in remaining weeks of 2016 and even in the beginning of 2017. However, some experts believe downward pressure in silver prices in the fourth quarter because US real interest rates are likely to go on a lower side once the Fed Meet decides to revise the rates in the fourth quarter.
But the silver mine production fell in 2016 and this will certainly lead to increase in the silver rates in the upcoming year. Less production will still put the metal on top of the industrial demand and this will ultimately lead to the metal shining in the coming time. Silver will witness renewed investor interests and increase in the selling portfolio.
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