Many investors have become wary of the commodities market with growing volatility in traditionally stable assets. However, Bloomberg reports that silver, the metal most known for its volatility, could see a resurgence with prospects for the European economy improving.
Bloomberg reports that European leaders have outlined a draft proposal for the expansion of the European Financial Stability Facility, the fund designed to help stabilize banks and financial systems put at risk by the ongoing debt crisis in Greece and elsewhere around the euro zone.
Though silver is generally thought of as a precious metal and sees heavy use in investment, it also plays a major role in manufacturing and industry, providing support from multiple sources.
Bloomberg notes that gold, often used as an asset haven in times of economic downturn, has declined with the announcement of the latest proposal and could decline further if an agreement is reached at the upcoming meeting on Sunday, October 23. Silver on the other hand looks primed to rise.
“Prices now look relatively cheap to where they have been recently,” David Wilson, an analyst at Societe Generale SA, told Bloomberg.