Precious metal markets tend to work in very interesting and unexpected ways. While the price of silver is falling rather hard, it seems the physical demand for this metal is rising rapidly.
Silver Price Pressure Remains
It is evident that the markets are still reeling. Despite a lot of measures being introduced all over the world, it seems as if investors are not looking to make major investments. In fact, they are more likely to keep selling their assets in search of cold hard cash. That is only to be expected during this time of financial uncertainty.
For precious metal speculators, things are not looking too great right now. The gold price is moving up again, although it is not finding any stable support level as of right now. The same goes for silver, as this precious metal continues to decline in value. A few days ago, it appeared as if some stability was found, but that level has been eroded once again.
Industry experts seem to agree that this negative sentiment will remain in place. With silver already dropping to an 11-year low this week, the sentiment may not necessarily improve either. A lower silver price can make the market more appealing to investors and speculators, however. In fact, it seems like an asset well worth investing in under the current market circumstances.
Physical Demand for Silver Spikes
What is remarkable is how demand for physical silver is on the rise. It is a significant increase compared to previous months. In fact, some experts claim the demand has not been higher for almost a decade. That in itself is very interesting, given the current market circumstances.
Although this increase is noteworthy, it appears that overall demand is still relatively low. This applies to both gold and silver alike. Getting the general public to buy precious metals under the current conditions is not easy. While demand is picking up, it remains to be seen if this is merely temporary.
Last week, the US Mint temporarily sold out of American Silver Eagle coins. That is pretty interesting, as the rate of sale in the first half of March outpaced everything sold during February 2020. A similar situation affects the Royal Canadian Mint, which noted a strong increase in gold and silver coin sales as well.
Combined with an increase in silver futures contracts on Comex, interesting developments are taking place. This is despite the price of that contract dropping to its lowest value in over 11 years. Silver is now more affordable to regular consumers as an investment vehicle. If this situation remains in place, the overall demand for physical silver may continue to spike