UNITED STATES March 21 2016 8:08 AM
NEW YORK (Scrap Register): Silver has been outperforming gold lately, causing a decline in the gold-silver ratio, said analysts at HSBC and Commerzbank.
This ratio measures how many ounces of silver it takes to buy an ounce of gold. Early Friday, Comex May silver hit a high of $16.17 an ounce that was its most muscular level since October. Silver has been helped lately by dollar weakness and improvement in industrial base metals, said Commerzbank.
“Because silver has noticeably outperformed gold of late, the gold-silver ratio has decreased from almost 84 at the end of last month to a good 78, its lowest level since early February,” Commerzbank added.
As of HSBC report, the ratio was at 79. “We think it may narrow further, implying that silver will gain on gold,” HSBC says.
“Up to now, silver failed to keep up with the gold rally. Part of this may be due to producers streaming or selling silver forward to raise cash. This increase may have weighed on prices. Longer term, this may be positive because future production has already been sold. Also silver coin and bars are becoming increasingly competitive with gold coins and bars and may see greater demand,” analysts at HSBC added.