12.08.202012:01 Forex Analysis & Reviews: Gold and silver: two sides of the same coin that didn't keep the price

The key instruments of the precious metals market, namely gold and silver, demonstrated price records once again. Yellow and white metals remain positive, continuing to grow. However, analysts say that uncontrolled optimism was hindered by their recent decline.

The price flight of the main precious metals was interrupted on Tuesday, August 11. Yesterday, gold declined by 4% to $1942 per 1 ounce, while silver declined by 8% to $26.88 per 1 ounce. On Wednesday, August 12, gold continued its negative trend, starting trading at $ 1945, but later sliding to $1931 per 1 ounce.

According to analysts, the reason for the collapse of the yellow metal was the active profit taken by market players. Experts believe that another factor of the decline is the expectation of further stimulation of the US economy, which provoked an explosion of risk appetites. The anticipation of new price records prompted gold buyers to take profit. As a result, the price of the main precious metal slipped to lows.

The situation with silver turned out to be almost the same: at the beginning, its price was actively growing, then it stopped, and now, it has entered a downward spiral again. It should be recalled that last Tuesday, August 4, silver reached $ 26 per ounce - a record for the past six years. Since the beginning of this year, the price of the white metal has risen by 46%, and by an impressive 118% since March.

According to Deutsche Bank analysts, such an explosive growth in a short period of time was last recorded more than 40 years ago, in 1979. Currently, silver is growing after gold, despite short-term price declines. On Wednesday, August 12, silver lost ground slightly, falling to $ 25.40 per ounce. At the same time, the precious metal tried to enter an upward spiral again, acting with varying success.

According to Standard Chartered, silver is currently undervalued. These precious metals market experts are confident that in the near future the price of white metal will grow faster than yellow one. Despite the stronger collapse of silver (by 8%) compared to gold (by 4%), the upward trend in its price will continue.

Analysts expect a reduction in the price gap between gold and silver in the near future. It should be noted that in 2011, when the cost of the gold exceeded $ 1900 per ounce, it was 50 times more expensive than the silver. But experts say that this is unlikely to happen again. Since the beginning of this year, the yellow metal has risen in price by 32%, and since March - by only 36%. Many analysts expect further growth in gold amid unprecedented stimulus from the US Federal Reserve, which launched a printing press. The rise in the price of the "solar" metal is also facilitated by almost zero interest rates, which push investors to buy gold. By investing in precious metals, market players tend to hedge high risks of possible depreciation of Fiat currencies.