The silver market recovered on Tuesday as prices pushed to a one-month high, above $16 an ounce. Although off its session highs, in May, silver futures are still holding substantial gains.
In May, silver futures prices hit a four-week high. The metal’s next upside objective is closing prices above substantial technical resistance at $17.00 an ounce. Silver saw its first resistance of $16.30 and then at $16.50.
Gold is pushing above $1,700 an ounce, hitting 7.5-year highs. Still, investors should not forget about Silver. 
Joni Teves, the precious metals strategist at UBS (Investment Banking Company), noted that it was just a matter of time before silver started to push higher. The metal has upside prospects, and there are tactical opportunities in the metal. Due to this, it has delayed gold’s movement, which suggests that it is well-positioned to profit from the catch-up trades, the strategist said.
UBS is positive on Silver. Still, Teves stated that the metal faces some headwinds.
Governments around the world have taken severe measures to stop the spread of Coronavirus. They shut all non-essential services and issued orders to stay at home. Weak economic growth could affect silver prices and allow them to be outperformed in gold’s shadow.
Silver does not tend to be as attractive a haven, and diversification flows as gold. A weak economic backdrop also serves as a significant drag given over half of the silver demand comes from industrial purposes.
The UBS strategist believes that gold has a higher room for growth in the near term. Gold is pushing above $1,700 and could attract renewed investor interest. The company expects gold prices to reach $1,800.
Gold and Silver have been on a free-fall in March
Renewed interest in Silver comes after its prices dropped to an 11-year low last month. The cost of gold and silver registered sharp falls, hit by general sales in all markets, in a context of severe financial volatility not seen in decades.
Although both metals are considered haven assets in uncertain times, they could not escape selling pressure, in a day of negotiation in which the theme seemed to be to sell everything and get cash as fast as possible.
Given the magnitude of the economic disaster that was coming, Wall Street collapsed. On the European and Eastern stock markets, the holders of precious metal urged themselves to mitigate their stock market losses by selling vast amounts of gold and silver, that would get them immediate liquidity, to recover from the deep wound.
Central banks have thrown everything they could into the markets.
Where is the price of silver going?
Recently increased gold prices are bringing down the gold-silver ratio, which is the indicator of how many ounces of silver would be required to buy an ounce of gold.
In the week ahead, the metal is expected to show buying opportunities as long as the ratio stays above 90, a level last seen in late February.
Two things are essential to remember. On the one hand, it is a complex environment in which to trade profitably. On the other hand, the gold-silver ratio should always be examined. It is the critical index for the price relationship between the two primary bullion metals.
