Silver steals a march on gold, equities amid US-China border tensions

Thanks to the aggressive stimulus measures announced by global central banks, this financial year has been phenomenal for those investing in the stock markets as well as precious metals. Within that, the returns generated by silver have been the most impressive.

So far, this financial year (from April 1 to date), silver has gained 63 per cent, while gold and the equities market (Nifty50 returns) have climbed 21 per cent and 30 per cent, respectively.

Silver, which also has industrial usage, has been a rather late entrant to the party.

At the start of the month, its returns for the financial year lagged that of equities, while were largely at a par with gold. However, so far this month, silver prices have zoomed more than 30 per cent amid weakness in the US dollar against major global currencies.

So what are the factors driving up precious metal prices? Sustained geopolitical tensions, mainly between the US and China; ultra-low bond yields, and dollar weakness have underpinned the gains.

Experts say prices of equities, gold, and silver rallying at the same time indicates concerns of staginflation, where investors fear inflation will continue to rise despite pick up in growth or jobs.