The seasonal chart is ahead of the actual development in time.
The seasonality of commodity prices is an essential factor that investors and traders consider in their decisions. This year, seasonality has worked exceptionally well for Silver, and several reasons can explain this success.
First, industrial demand plays a critical role in silver prices, as silver is used in many industries, including electronics, solar panels, medical equipment, and jewellery manufacturing. In times of a robust economy and increased industrial activity, demand for silver increases, which can lead to a rise in price. This year has seen a strong global economic recovery, particularly in developed countries, resulting in increased demand for silver.
Second, uncertainty in the financial markets is affecting the price of silver. Silver is often a "safe" investment instrument that increases in value during economic or political turmoil. This has led to an increase in silver demand and a corresponding price rise.
Another critical factor in silver's seasonal performance is the investment behaviour of large institutional investors. These investors often have specialised departments that closely analyse the market and follow specific trading strategies. Some of these strategies are based on seasonal patterns and historical price movements. Large institutional investors investing in silver based on seasonal factors can lead to significant price increases. Combining positive seasonal patterns and increased institutional demand helped silver prices this year.
Another reason for silver's seasonal solid performance this year is low supply. Silver is often a by-product in the mining of other metals. When production declines, it can lead to reduced silver production. There have been reports of production shortfalls in some mining regions, resulting in limited silver availability and higher prices.
The chart shows the relative performance of precious metals. It shows that silver has achieved the second-best performance after gold.
Several factors have supported Silver's seasonal performance this year. Robust industrial demand, uncertainty in the financial markets, the investment behaviour of institutional investors and the limited supply situation have all contributed to the seasonal rise in the price of silver.
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