The gold price recently powered higher in response to the UK’s surprising Brexit vote and has continued its momentum as other global concerns have arisen.
Another metal traditionally viewed as a safe haven in times of uncertainty is silver.
For some days after the vote, silver prices remained relatively static. But late last week the price of silver shot up dramatically.
When gold becomes pricey, some investors look towards silver instead. This may explain why the price did not react immediately.
Earlier this week, however, silver leapt to over US$21 per ounce for the first time in two years. At the same time, the gold/silver ratio, which reflects how many ounces of silver it takes to buy an ounce of gold, dropped to a 12 month low.
Even though some analysts think silver could continue to outperform gold for some time to come, history suggests it won’t all be plain sailing. After all, this is the “Devil’s metal” we’re talking about!
Silver prices are notoriously volatile. Large spikes followed by dramatic crashes are a familiar feature of the silver market, often related to fluctuations in industrial demand compared to gold, which is more linked to retail demand.
The sudden speed with which silver prices can move, however, offers buyers potential short term opportunities on top of safe haven buying.
Those who understand the market and ‘buy low’ will be in a strong position to take advantage of the next spike - so long as they are able to trade at short notice.
The Perth Mint Depository, which holds more than $3 billion worth of precious metals for more than 22,000 active clients located in 123 countries, recently launched an online platform making it simple for private investors to trade precious metals 24/7.
The Depository Online (DOL) system constantly streams and updates ‘buy’ and ‘sell’ prices, except for a short period over the weekend when international bullion markets are simultaneously closed.
By enabling clients to open an account with as little as $50, it’s the perfect way for investors to build a metal position over time with the flexibility to exit swiftly and easily whenever they choose.
Read more about Depository Online and the guarantee from the Government of Western Australia under which it operates.