When Gold and Silver Diverge, Investors Should Take Note | Presented by CME Group

When Gold and Silver Diverge, Investors Should Take Note | Presented by CME Group

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although gold and silver tend to track
each other from a correlation standpoint
based on historical price action silver
is more closely tied to the ABS and
flows of the economy here are three
reasons why gold is viewed as an
alternative to the US dollar in times of
increased geopolitical tensions and
economic downturns this can impact the
gold silver correlation during these
types of disruptions one of the primary
factors here is Supply the gold market
is over 10 times bigger than the silver
market a second Factor silver has a
higher industrial use approximately 56%
of all silver Supply is used for
industrial applications therefore it
would file as global economic activity
picks up the demand for silver would
increase as well on the other hand
approximately 12% of gold Supply is used
for industrial applications another
Factor impacting the price of silver
versus gold is storage because silver is
much cheaper than gold per ounce it
costs a lot more to store silver than
gold this inventory cost can vary but it
does impact the price of silver relative
to Gold during economic Cycles
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Although gold and silver tend to track each other from a price correlation standpoint, the two precious metals also experience frequent divergences, and typically due to unique influences. Here are three reasons why the gold-silver correlation sometimes breaks down and what these divergences can tell investors about global economic conditions. Presented by @cmegroup: https://www.cmegroup.com/openmarkets/quicktake-by-bloomberg.html?utm_source=youtube&utm_medium=paid_social&utm_campaign=quicktake_evergreen&utm_content=more_insight
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