Silver futures decided to be the market leader among the precious metals commodities today, closing 58 cents higher at $15.37 in today’s action. Gold futures have received most of the attention lately as they are closing in on an all-time high price, but silver took the spotlight today.
Gold futures are only about $27, or about 3 percent, away from the all-time high of $850 set in January 1980. Meanwhile, silver futures are about $34, or 225 percent, away from its all time high price of $50. Why has silver lagged behind so much?
Silver is considered more of an industrial commodity. Unfortunately, one of the primary uses for silver is in photographic film. The demand for developed film has dropped with the introduction of digital cameras, while many people prefer to send and store pictures electronically.
It is likely that silver will take on more of the factors that are driving the price of gold – lower Dollar, inflation hedge, flight to quality, etc. as traders re-evaluate the investment value of this commodity. Gold has been the leader for several years, but silver futures might look to close the gap in prices as investors are looking for an undervalued play in precious metals.