Stock Advisory Company, Investors bet big on silver for 2018

The underperforming metal for 2017 expected to return 17-20%

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Investors have started betting big on silver amid hopes of a sharp upswing in its prices in the calendar year 2018 (CY18).

Despite the immense potential for an increase, following the improvement in industrial commodities’ prices, silver remained an underperformer in CY17, with a mere 6.3 percent of returns in dollar terms, and nearly 4 percent loss in value in rupee terms. By contrast, all asset classes in commodities segments, such as base metals, crude oil, etc, yielded returns of up to 30 percent.

Considering silver was a weak performer in 2017, leading global investment bank Goldman Sachs forecasts silver to fare better than gold in 2018. “Typically, silver tends to outperform gold at the current state of the business cycle, as it is more strongly leveraged to global growth, given its significant industrial use. However, the relationship broke down post-2011, as price induced silver industrial demand to diverge from the growth of the business cycle.