Futures Market News
Commodities investors see silver lining
Oct 20, 2010 03:15 PM
Speculation about the fragility of the global economic recovery has driven up the price of gold in commodities markets around the world - but a better-performing metal with more economic applications has generally missed out on the headlines.
Silver, which has held a significant role in coinage as long or longer than its more expensive counterpart, is up more than 40 percent this year; gold, by contrast, has gained about 23 percent.
It's also more versatile than gold, which gains and loses value as a pure play hedging against inflation and economic meltdown.
"There are two drivers for silver: industrial demand and gold. The two drivers are both positive at the moment," Matthew Turner, an analyst at Mitsubishi, told the Financial Times.
Silver is bought as an investment and a hedge, in the same manner as gold. However, it's also employed in high-technology industries like solar panel manufacturing.
It also tends to be a lot more volatile than gold - in the 1980s, the price infamously spiked and then crashed after the Hunt Brothers tried to corner the silver market using silver derivatives.
Don’t Miss Our News Updates!
Follow our breaking news stories and get a unique take on current events that may impact the commodity futures markets. Multiple new articles are posted each weekday. Subscribe to our commodity news updates by email, and receive real-time updates with our RSS feed, follow us on Twitter @DanielsTrading, become a fan on Facebook to stay informed.
SPECIAL OFFER: TAS Live Room FREE VIP Pass
Enjoy interactive training on Market Profile®, volume analysis & the TAS Tools indicator package!
Daniels Trading is rolling out the red carpet for you. With your complimentary VIP Pass, you’ll enjoy access to the popular TAS Live Room. Your VIP Pass provides admittance to the next Tuesday morning live training session (8:30am-10:30am CT, Chicago).
Register for Your Free 2-Week Trial of the dt Insider Market Advisory!
With your free trial membership, you'll receive full access to our exclusive trade recommendation service and all of the timely and accurate trade information you need to feel comfortable participating in the markets.