Diverse DigestAs gold prices hit new highs in the UAE, another precious metal has quietly been outperforming it: silver. Silver has proven a stellar investment, with gains of nearly 33% compared to gold this year. This surge has caught the attention of investors, prompting a closer look at potential as a valuable addition to investment portfolios.
Silver’s Performance
Spot silver prices recently exceeded $30 per ounce, marking their highest level over a decade. Starting the year at around Dh2,800 per kilogram, silver has soared to over Dh3,800, marking it as one of the best-performing major commodities in 2024. Vijay Valecha, chief investment officer at Century Financial, highlighted silver’s rise from Dh3,127 per kilogram on May 1 to Dh3,870 on May 21.
For investors, this performance translates to significant returns. An investment of Dh10,000 in silver at the beginning of January 2024 would now be worth approximately Dh13,415, compared to Dh11,701 for the same investment in 24K gold.
Investment Opportunities in Silver
Historically, silver has not been the first choice for investors in the UAE, but its recent rally could change that. Valecha suggests that, like gold, silver can be purchased as physical bullion or jewellery. Bullion includes physical bars and coins, providing a tangible investment option.
Will Silver Continue to Shine?
Ole Hansen, head of Commodities Strategy at Saxo Bank, noted that the recent rallies in silver and gold are driven by broader market dynamics and investor sentiment beyond their traditional roles as safe havens. Industrial demand for silver, particularly in clean energy technologies such as solar panels, is significant.
The Silver Institute projects record levels of silver usage in the industry this year.
Mohamed Hashad, the chief market strategist at Noor Capital, emphasized silver’s durability and tendency to move with gold due to their similar roles as economic hedges.
Central bank purchases, retail interest in China, and expectations of lower US interest rates have fueled gold’s surge. Silver has also benefited from these trends.
A Dual Role: Financial Asset and Industrial Commodity
Silver’s financial asset and industrial commodity position enhances its appeal. Hansen pointed out that geopolitical risks, Chinese retail demand, debt concerns, and inflation outlook all support investor interest in gold and silver.
Exploring Alternatives
While gold and silver dominate the precious metals market, Hashad mentioned palladium and platinum as attractive alternatives due to their unique market dynamics and industrial applications.
SilverSilver’sd rally presents a compelling case for investors in the UAE to consider diversifying their portfolios. Its dual role as a financial asset and industrial commodity, along with robust market dynamics, positions silver as a valuable investment opportunity in 2024.
Source: Khaleej Times
Diverse Digest
