Silver is set to follow gold

With gold rallying 10% so far this year in dollar terms, some investors are starting to pay attention to "the yellow metal's sidekick", says Debbie Carlson for US News & World Report. Sometimes dubbed "poor man's gold" silver trades on about $16.50/oz, compared with $1,500/oz for gold silver prices are up 4.5% so far this year.

Demand from retail investors is a key catalyst for silver, adds Myra Saefong in Barron's. The World Silver Survey shows that "global investment in silver bars and coins grew 20% last year", yet supply is tight: 2018 also brought "a third consecutive annual decline in global production of the metal".

Yet unlike gold, which is used almost entirely as a store of wealth and in jewellery, the silver price is driven by both investment and industrial demand. And silver's rally this year has been depressed by concerns about the latter, says Capital Economics. But recent weeks have brought a wave of "safe-haven buying" that is likely to support the price for the rest of the year.

In fact, with so many investors looking for safety, it is surprising that silver prices have "lagged so far behind" this year's gold rally, says Jon Sindreu in The Wall Street Journal. As of early July, the ratio of gold to silver stood at a 24-year high. History shows that on a one-year time horizon the two precious metals are closely correlated. That leaves plenty of scope for silver to follow gold higher.