2020 has been quite a year. Against the backdrop of the global health crisis, political and economic turmoil and a weakening US dollar, commodities known for their safe-haven properties such as gold and silver have become assets of choice for many investors looking to diversify their holdings and mitigate the risks.
Do you also want to add some “shine” to your portfolio but cannot decide which precious metal to go for? In this article, we walk you through silver’s performance so far in 2020 and check out what factors will likely drive its price going forward. To help you make informed investment decisions, we also review what the latest silver price predictions look like according to Wall Street analysts.
Silver price analysis for 2020: the darkest hour is just before the dawn
The white metal has been on a wild ride so far this year. After a relatively strong second half of 2019, silver started 2020 at $18 per ounce, inching higher to $19 per ounce in February. However, the broader sell-off across global financial markets followed as the start of Covid-19 lockdowns prompted investors to exit their positions. The commodity plummeted 38 per cent to hit an 11-year low of $11.74 per ounce on March 18.
Unlike many other assets, silver recovered quickly as investors sought a safe haven in precious metals. Already by July, its price had soared to $24 per ounce. Manufacturing activity started to slowly recover in summer, increasing industrial demand for the physical metal. This, coupled with strong investment demand, helped to make the silver price outlook brighter than ever.
In the meantime, the DXY Index, which tracks the performance of the US dollar against a basket of major currencies, had been sliding lower, falling to a two-year low in August, giving further support for commodity prices.