Silver outperforms gold in May.


Silver has performed better than gold over the last three weeks. The relative strength (RS) chart comparing silver to gold has positive tendencies to it. The RS's green 5-week EMA is trading above its orange 10-week EMA, in bullish formation. Moreover, its RSI is above 50, suggesting an underlying bullish momentum regarding the outperformance. If the RSI remains above 50, silver will continue to perform better than the yellow metal.

Silver is up a remarkable 32% year-to-date and has reached 12-year highs, with demand typically from industry – half of silver is used in industrial process and technology. There is some safe haven demand for silver, but its industrial demand has been propelling its price upwards, thanks to robust manufacturing activity.

It is a key material of solar panels with China racing to manufacture these on the back of the transition to sustainable energy. In December, China's silver imports reached a three-year peak of 390 tons, followed by 340 tons in April, significantly surpassing the five-year monthly average of 310 tons. According to a January report by the Silver Institute, global silver demand is projected to exceed supply for the fourth consecutive year in 2024.

Image by kevinp133 from Pixabay

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Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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