Silver shines as hedge against inflation for investors

Silver is making quick strides and glittering brighter than gold for many investors. Gold price climbed to a record and silver topped USD 41 an ounce, gaining for the ninth straight day in the best run since March, 2008, as investors sought precious metals as hedges against accelerating inflation.

Immediate-delivery bullion gained as much as 0.2 per cent to USD 1,478.18 an ounce and traded at USD 1,473.20 at 11:47 am in Singapore.

Gold for June delivery in New York climbed as much as 0.3 per cent to USD 1,478 an ounce, also an all-time high.

Spot silver rose as much as 1.5 per cent to USD 41.52 an ounce, the highest level since 1980, before trading at USD 41.47 an ounce.

Analysts said investors have been buying up the two metals as a hedge against uncertainty in the Arab world, rising inflation and sliding major currency values.

Jeffrey Currie of Goldman Sachs predicts gold will hit USD 1,625 by the end of the year: "Gold is ultimately dependent upon real rates, which are a function of both inflation expectations and monetary policy.

A top in gold prices will only become apparent when the risks of sovereign default are behind us with a clear and successful exit of the stimulus we've seen over the last few years".

Recent predictions and those generally accepted by the markets have silver hitting USD 50 a troy ounce and gold to crash the USD 1,550 mark soon.

While these rallies have had clear links to fears about inflation, there is more to this situation than just inflation fears.

(Source: http://www.indianexpress.com/news/silver-shines-as-hedge-against-inflation/774698/)