Silver fell to $ 24.34. What is the reason too? Is this the end of the bull market on precious metals? Or maybe the opposite – it is only a correction and also a chance for a “cheap” purchase?
Silver is falling
On Monday, the price of silver futures fell by as much as 8 percent. We saw such low metal prices for the last time in mid-August.
What is the reason for these declines? According to analysts, this is the result of investors’ fear of a repeated “closing of economies” in some countries in Europe. The second lockdown will probably lead to an economic collapse, and this will result in a decline in demand for silver. Kruszec is used in the production of jewelry, silverware and cutlery. Today it is also used in the production of photographic films, electrical contacts and mirrors.
Then there is what is happening in the USA. Following the death of a left-wing Supreme Court judge, President Trump is likely to want to nominate a new judge before the end of his term. This may provoke a harsh reaction from the Democratic Party and, as a result, block the new public spending package aimed at stimulating the current economic situation at the expense of an increase in public debt.
Another factor that weakened silver is the strengthening of the dollar. This would suggest that the bull market for precious metals is coming to an end. In addition, we saw declines in the gold, palladium and platinum charts. The fear of metal supporters, however, may be exaggerated. Further reprinting of currencies and low interest rates they are unlikely to keep the dollar strong in the long run.
Anyway, looking more broadly, the investment in silver is still good. Since the beginning of the year, silver prices in USD have increased by 35%, gold by 25% and palladium by 19%.
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