When precious metals prices got a boost from the dollar's losses Monday, silver shot up nearly 3 percent while gold barely moved up less than a quarter percent from Friday. Silver's industrial side is partly responsible for its continued outperformance of gold in the precious metals market.
By Melissa Pistilli—Exclusive to Silver Investing News Silver prices began to recover weekly losses climbing as high as $16.95 an ounce Friday. The white metal started this week on a roll reaching levels not seen since nearly two weeks ago. Hitting a high of $17.45 an ounce Monday, silver was nearly up a dollar over last Wednesday's close of $16.56. Both gold and silver were benefitting from a depressed dollar the past few days as the situation in Europe looked a little brighter (for the moment) after the EU summit last week and the release of uplifting economic data from the region. The euro rose against the dollar Friday following news that European leaders had agreed on a strategy for handling Greece's financial crisis. Along with the IMF, the EU said it would provide loans to Greece in the event it can't raise funds through a euro5 billion bond issuance. The euro continued to rise against the dollar Monday after Greece's 7-year bond issue was successful, reassuring the market and wetting investor's appetite for risk. Improved confidence in the European economic outlook gave promise that recovery is building momentum despite setbacks in Greece and Portugal. In March, the services and manufacturing industries grew at their fastest rate in 2.5 years and economic confidence is at its highest level in four months. While growth is expected by most analysts to be of the modest variety, the prevailing attitude is one of optimism for 2010. The price of silver also got a lift from its yellow cousin on renewed gold buying in China. However, silver is also likely getting help as an industrial metal with positive signals on China's economic front as growth for the last three months is thought to have reached 12 percent per year. Silver's Outperformance of Gold Will Continue When precious metals prices got a boost from the dollar's losses Monday, silver shot up nearly 3 percent while gold barely moved up less than a quarter percent from Friday. Yes, silver is a much smaller market than gold and this helps contribute to proportionally heavier swings in price, but silver's industrial side is also responsible for its continued outperformance of gold in the precious metals market. While the sector is facing pressure from a rising trend in the dollar, signs of economic recovery worldwide are giving silver the support gold lacks.