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Silver Price Update: Q1 2017 in Review

The silver price gained more than 10 percent in the first quarter of the year, fueled by worldwide economic and political uncertainty.

Donald Trump’s presidential election win has been a key driver of that uncertainty. Concerns about what he may or may not do have sent investors rushing to buy precious metals like gold and silver as safe-haven assets. Many analysts believe that silver in particular is now on track for another positive quarter, and will continue to perform well in the coming years.

With that in mind, here’s an overview of the main factors that impacted the silver market in the first quarter of 2017, and a look at what investors should watch out for heading into Q2.

Silver price update: Q1 overview

Silver has been surging since the second half of 2016. Its only significant drop during Q1 2017 came in March before the US Federal Reserve announced its second rate hike in three months; however, once the hike actually came, the silver price rebounded.

The white metal has outperformed gold so far this year — according to Bloomberg, the gold-silver ratio rose to 71 on March 14, the most in two months, and above the average of 62 seen in the last decade. That shows there’s potential for silver to appreciate further compared to gold.

Silver hit its highest point in 2017 on March 1, when it briefly reached $18.39 per ounce, a three-month high. It reached its lowest point of the year on January 1, when it sank to $15.91; it was pushed down that day by a higher US dollar and by the Fed’s decision to increase interest rates.

The silver price finished the quarter at $18.27, and as mentioned, many market watchers believe that further gains could be in store later in 2017. In particular, instability caused by Trump and upcoming European elections could improve sentiment among institutional investors and push the metal higher.

“We expect that the factors that buoyed institutional silver investment over much of 2016, and have carried over into the early months of 2017, will remain relevant for the remainder of this year,” said Michael DiRienzo, the executive director at the Silver Institute.


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