Investors have been putting their biggest bets on silver these past few sessions as the metal showed a positive performance ahead of summer. Other precious metals such as gold, remained supported by the pushed back of the projected rate hike by the Federal Reserve.
The momentum for the precious metals has come back amid the modest gains of the greenback and as the market watch over the rate hike delay from the Fed. The central bank was reported calling off the June rate hike after the downbeat job data in May.
Consequently, the expectation for a July hike went down to 36 percent compared to the 42 percent projected probability last month. The market sees a 51 percent chance of a rate increase this September instead.
Silver prices climb to 25 percent this year, riding along the recorded rally of the bullion in 2016. A huge amount of money is forecasted coming towards the silver market as the silver funds have received a lavish of new cash and assets are moving up to an all time peak. A market expert called the situation of the silver as a gold on steroids.
Last Thursday, the gray metal ticked higher for the fifth time already in the last six days,marking the rally of almost 7 percent this month. This is supported further by the massive drop of the gold silver ratio, which commonly indicates the entry and exit in precious metals.
An investment expert explained that a lot of people are looking at silver as something that could potentially benefit not only from increased interest in precious metals, but also because it has a such industrial demand.
However, the global silver supply was projected of slipping in 2016 by 2.4 percent to 785 million ounces. Based on the data released by the Silver Institute, the decline between the supply and demand of silver stood at 21.3 million ounces in 2015. Futher, the production of the gray metal might decline the first time in the last five years.
Elsewhere, gold price remained close to its 3-week highs, but eased a little as the investors waited for the policy rate decision of the Fed. As the central bank seemed to be indecisive the yellow metal has climbed approximately 19 percent as it remained to be sensitive in the changes of the U.S. rate.
"The cautiousness of investors is probably temporary and we would expect investors to take this opportunity to reload and look at further gains in the coming weeks… There are some key data releases this week as well and investors probably don’t want to commit aggressively until some of that data is passed. I think they’ll be positioning for a general move higher over the next week," an analyst shared as silver overtakes other metals.