Silver, gold seen sustaining performance for 3-5 more years

ABS-CBN News

Posted at Feb 09 2021 02:44 PM

Silver, gold seen sustaining performance for 3-5 more years 1
Gold bars. ABS-CBN News file photo

MANILA - Precious metals such as silver and gold may continue to perform well for another 3 to 5 years as investors flock to safe haven assets during the pandemic, a dealer said Tuesday.

Brian Lan, managing director of Goldsilver Central, said the pandemic led to a surge in demand, with silver prices rising 48 percent since last year, outpacing gold's 25-percent gain.

The price of silver shot up as high as $30 per ounce on Monday, but eased to $27.48 at the time of the interview. Gold was at $1,819.5 the same day and platinum at $1,149.48.

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COVID related delays slowed production and supply, also contributing to the spikes in prices and premiums of holding an actual silver and gold bar, Lan said.

"If you're looking at a silver bar, premiums [for owning an actual piece] can go up to as high as 15 percent. Pre-COVID, these premiums only go to about 5 percent...Prices have gone up quite a bit because of COVID related delays and sudden influx in demand, " Lan said.

He added there were also a lot of retail investors fueling the "silver squeeze" or jump in silver spot prices.

He noted that unlike the "short squeeze" that happened with GameStop shares, the silver squeeze does not affect dealers and banks the way hedge funds were hurt by the phenomenon.

"Unlike hedge funds borrowing and selling stocks which can hurt them, for commodities, we dealers and banks manage our positions. When we buy physical metals, we also sell futures contracts to mitigate risks. If the squeeze goes higher, it does not affect us...Commodities are more complicated than the stock market," Lan said.

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