Is silver trading at suitable levels for investment?

Silver prices declined in European trade on Monday off three-month highs on profit-taking as investors shun off new purchase positions ahead of the Federal Reserve’s policy meeting. 

Silver prices recently scaled $25 for the first time this year, with some questioning the suitability of current levels for safe investment in the precious metal. 

We’ll try to tackle the questions and bring up the views of retailers on current silver prices compared to the recent record highs scaled by gold. 

Silver Prices Today

Silver prices fell 0.9% to $24.95 an ounce, with a session-high at $25.19, after closing up 1.5% on Friday, marking a three-month high at $24.45 on strong retailer demand. 

The white metal rallied 3.6% last week, the third weekly profit in a row on strong investment and actual demand. 

The Fed 

Tomorrow, the Federal Reserve will start holding its two-day policy meeting, expected to maintain interest rates unchanged at 5.50%, the highest in 23 years. 

The policy statement and Fed Chair Jerome Powell’s press conference will likely hold important clues on the future of US interest rates this year.

Retailers  

As retailers seek assets to guard against potential risks as global central banks change their policies to a more accommodative direction, it’s clear that silver is becoming an excellent under-valued choice. 

The recent silver surge tipped off many retailers that silver remains far from its true value compared to gold, which is trading near record highs. 

Gold hit a record high of $2195 an ounce on March 8, while silver is very far away from its record high of $49.78 scaled in April 2011, in turn triggering strong demand on the white silver for its potential hidden value.  

Historically, silver had usually taken widen movement arcs upside and down compared to gold, however recent times were an exception, with retailers now paying more attention to the missing silver value.