Gold prices in the UAE have been consistently rising, reaching consecutive record highs in recent weeks. However, silver, another precious metal, has surpassed gold's remarkable rally. It has outperformed gold with gains of nearly 33 per cent compared to gold's 17 per cent, as confirmed by an expert.
Spot silver prices have exceeded the $30-per-ounce mark, achieving their highest point in over a decade. It stands out as one of the best-performing major commodities this year. Prices have surged from approximately Dh2,800 per kg at the beginning of the year to over Dh3,800 currently.
Vijay Valecha, the chief investment officer at Century Financial, informed Khaleej Times that the metal rallied from Dh3,127 per kilogram on May 1 to Dh3,870 on May 21. From an investment perspective, the expert indicated that if an investor had allocated Dh10,000 to silver at the start of January 2024, it would have grown to around Dh13,415. In contrast, investing the same amount in 24K gold would have resulted in a final value of Dh11,701.
Despite not being the primary choice for investors in the UAE, the record rally of silver could lead to increased investments, according to Valecha. Similar to gold, individuals seeking to invest in silver can do so by purchasing physical silver in the form of bullion or jewellery. Bullion encompasses physical bars and coins, as stated by Valecha.
Will silver continue to shine? Ole Hansen, the head of Commodities Strategy at Saxo Bank, mentioned that the recent rallies in silver and gold are not solely driven by their traditional role as safe havens. Instead, they are supported by broader market dynamics and investor sentiment. These metals are increasingly considered attractive investment opportunities amidst tight supply for crucial industrial metals and robust demand projections.
While silver's recent gains have outpaced those of gold, it remains relatively affordable, according to another expert. Mohamed Hashad, chief market strategist at Noor Capital, highlighted that both precious metals typically move in tandem due to their similar roles as macroeconomic and currency hedges. Gold's record highs have been attributed to central bank purchases, retail interest in China, and renewed expectations of lower US interest rates, all of which have benefited silver as well.
Silver's value is supported by its dual role as a financial asset and an industrial commodity. It is indispensable in various industries, including clean energy technologies. With the robust growth of the industry, silver usage in solar panels is expected to reach record levels this year, as stated by the Silver Institute.
Hansen also agreed that industrial demand and investment interest position silver as a compelling asset in the current market environment. The factors influencing investor sentiment in gold and silver include geopolitical risks, Chinese retail demand, debt concerns, and the inflation outlook, as highlighted by Hashad. While gold and silver are the traditional go-to investments in precious metals, palladium and platinum are presented as attractive alternatives due to their unique market dynamics and industrial uses.
