Silver didn’t get the push it needed to outpace the rise in gold last year, as some analysts had expected, but good things come to those who wait.
“Many of silver’s key drivers that painted a bullish picture last year are still in play for 2018, particularly rising inflationary pressures and a weaker U.S. dollar,” says Maxwell Gold, director of investment strategy at ETF Securities.
Even so, silver futures SIK8, -0.25% have lost more than 4% so far this year as of Monday, trailing gold’s nearly 0.8% climb. In 2017, gold gained nearly 14%—roughly double the rise for silver. Silver closed Monday at $16.412 an ounce.
Brien Lundin, editor of Gold Newsletter, says he expected silver to top gold last year and this year, but that hasn’t happened because the rally in gold hasn’t had “the kind of consistency…necessary to lead investors to look to silver for additional leverage.”
That will come, he says, given his expectation for further declines in the U.S. dollar on the back of “recent signs of rising inflation and the fact that we’re in the back half of the [Federal Reserve’s] tightening cycle.” Other central banks look poised to begin tightening monetary policy, he says.