Mexico, Peru and China are the major producers of silver shown by various surveys and China itself is the second largest consumer of the commodity too. In this year, the silver trading in the largest spot market of China did not show good signs; the major reason being said behind this is the decrease in the industrial use of the metal. It is unforgettable that silver is the best performing precious metal in the basket this year even though many investors seek hedging against it.

The ebbs in China, though considerable, is not getting the whole concern as it is not due to the global recession but it is the China’s economy which has slowed down long, for seven quarters now. More than 65 percent of the silver demand is its industrial use in photography, solar and electrical appliances; earlier years, the demand aggravated by 5 to 7 percent but the declines are only recorded in recent years. This scenario in China will definitely affect the overall trading scenario as it may get viral which is a basic phenomenon of the economy.

We discussed yesterday how gold is attributing to the current situation; it is going up as well. No need to mention that gold leads the group of precious metals and generally, other metals like silver and copper usually flow the trend of gold. In the current scenario, monetary easing, rising inflation expectations and persistent super-low interest rates have weakened the currency whereas strengthened the gold. For the economic safety, there is also a robust investment demand. This is the reason why gold is attracting lots of investment and is being followed by silver as it is affordable by larger number of people. No wonder, silver has been known as the most volatile of the precious metals but this volatility also increases the probability of opportunistic investment.

There are speculations by the experts that the industrial use of the silver will reach 57% of the total silver fabrication which will happen to be the highest in the 25-year price data series.  This report is the result of the expected well-off economic outlook, distinct growth in the automobile sector and some retrieval in the housing and construction industry. Polyester is one of the highly produced fabric item and for the production, ethylene oxide is essential. Silver is the catalyst to produce the ethylene oxide which is highly anticipated currently, thus increasing the price in the long run.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.