China rare earth exports on the rise
By GCRU Gold News on Wednesday, March 9 2016, 10:15 - Permalink
In a separate note out from Capital Economics, Julian Jessop, the head of commodities research, looks at silver. Why has its price not risen as quickly as gold’s? Jessop believes that silver may simply have recoupled with the prices of more conventional industrial metals rather than with gold. After all, as he notes, industrial uses account for more than 50% of the demand for silver, as opposed to less than 10% in the case of gold’s consumption.
I have made the point several times that silver has a unique problem: that is, it was equally a precious metal and an industrial metal. But now the scales may be tipping more and more to the industrial uses side, and this is being driven partly by silver’s fast growing role as a technology metal, those uses ranging from solar applications to health applications (its antimicrobial properties seeing its use in bandages and medical equipment) and in such areas as water purification technologies.
Sure, it will still have a big role as a precious metal and appeal to investors. But I suggest that, as the years pass, that appeal may diminish as it becomes more and more an industrial/technology metal. In times of economic downturn, that puts silver as a greater disadvantage in precious terms with the appeal of gold.