Falling Silver Prices Could Be a Warning of Economic Woes

June 5, 2019

Last month saw silver prices fall for the fourth consecutive month. Prices are down 6 percent since the start of the year. Last week, the gulf between the values of gold and silver widened to the highest level since 1993. The value of silver relative to gold is considered to be an indicator of economic momentum. When investors are worried about market volatility, they usually favor gold, increasing its price, and abandon silver, dropping its value.

Silver is something of a hybrid commodity. It is a precious metal, but about 55 percent of demand for silver comes from industrial uses, so some traders consider it more of a base metal like copper. The low demand for silver in this arena could be an early indicator of weaker manufacturing.

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