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Higher Gold: Silver Ratio makes Silver a better investment bet

iconSep 30, 2014 11:23
Source:SMM
International gold prices are presently at 69 times the price of Silver.

 Author: Paul Ploumis29 Sep 2014 Last updated at 07:40:10 GMT

NEW DELHI (Scrap Monster): International gold prices are presently at 69 times the price of Silver. The Gold: Silver ratio is significantly higher when compared with the 10-year average of 57.75:1. Moreover, Silver has witnessed a sharper fall than gold during recent times. All these factors, coupled with anticipated surge in industrial demand makes Silver a better investment bet than gold, according to analysts.

Global gold prices have fallen nearly 35% off its peaks. On the other hand, Silver is trading almost 60% down from its all-time highs. In domestic market, gold prices have declined by 5.97% in the past six months, whereas Silver has witnessed a sharper correction of 10.48% during the same period.
 
According to analysts, gold prices in international market could go down further. Moreover, interest rate hike decision by the US Fed may also prove negative for the yellow metal. Investors are currently seen shifting their money to other performing asset classes such as stock markets.
The drop in gold prices may drag down Silver prices too. But the fall will not be as severe as in gold. The Silver prices are already beaten down and there exists little space for Silver to fall further, believes analysts.
 
According to analysts, the rising industrial demand for Silver is likely to cushion any further fall in prices. Silver is used extensively in manufacturing photovoltaic cells of solar panels. Rise in consumption of electronic devices including smart phones and tablets will result in increased demand for Silver in the coming years.
 
In summary, beaten down prices and the anticipated rise in industrial demand makes risk-rewards ratio more favorable to Silver.
 
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