Silver expected to outshine gold
More gains forecast for the precious metal this year as fundamentals are strong but traders says thin volume poses risks to investors
Silver is expected to appreciate more than gold this year but traders warn investors may risk getting burned because of the high volatility in the thinly traded metal.
"Silver is now trading at a much lower level than its normal difference from gold. As such, we can predict silver will rise further this year," Chinese Gold & Silver Exchange Society president Haywood Cheung Tak-hay told the South China Morning Post.
Cheung said both gold and silver were considered safe havens for investors in an uncertain economy and skittish markets, adding that the continuing euro-zone debt crisis had led investors to pay more attention to these two precious metals.
According to British fund house Schroders, silver has beaten gold in the past 10 years with a total return of 503 per cent, against gold's 461 per cent.
Last year, silver rose 8.9 per cent to US$30.85 an ounce, compared with a 6.9 per cent gain in gold, which is now hovering at US$1,660 an ounce.
Cheung said silver would trade between US$27 and US$35 in the first half of the year and between US$33 and US$40 in the second half.