There is a case for silver if either the economy performs well or poorly in 2020, said Peter Hug, global trading director of Kitco Metals.
“I still believe silver, relative to gold, is going to outperform next year and I am bullish silver,” Hug told Kitco News.
Should the economy perform well, industrial demand for silver would rise, Hug said.
“If you take the context that everything is going to be rosy, and the equity market is going to continue on its path, the economy is going to grow at 3%, China is now basically troughed and the Europeans have troughed, just from an industrial perspective silver demand is obviously going to increase,” he said.
But even if growth slows down, there would still be demand for safe haven assets, Hug added.
Hug noted that Asian markets have started to tilt toward a preference for silver.
“I’ve been responsible for the Hong Kong office for about six years. Almost primarily in Hong Kong, our ratio of gold sales to silver were about 95 to five percent. Over the past year, we’ve had extreme demand in silver, especially 100 ounce silver bars, and now the ratio is almost 50 – 50,” he said.
Silver rose 17% in 2019, underperforming spot gold which climbed 18% in the same period.