After posting a 3.9% gain by the end of the previous week, spot silver was on its path to record a second weekly gain, with prices approaching the $30 mark. Previos losses were reversed throughout the week, with spot silver prices rallying every single day until Friday.
The negative reversal during the week’s last trading session is attributed mainly to the news about S&P downgrading credit ratings of several countries within the euro zone.
So far, majority of market analysts project silver prices to remain buoyant, because of an increase in demand from speculators, hedge funds and metal buying ETF’s looking for a cheap substitute for gold.
However, the slowing global economy has dried up a lot of industrial demand for the white metal. This may be a serious reason for marginal correction in the near term.
The decline in the greenback, paired with speculation of China easing its monetary and fiscal policies to strengthen its economic growth, also stimulated the prices rise above the $30 mark for the first time since middle of December 2011.
Following delining the gold, by the end of the week silver fell under $30, as the depreciating against the USD euro weighed on the bids for the white metal.
Despite the late week decline, spot silver prices still marked a second consecutive weekly gain in excess of 3.0%.
Gold to silver ratio slid to 54.83 after a reading of 56.13 during the previous week.