Is silver the new gold?

[LONDON] A couple of months ago, Germany’s finance ministry took a remarkable step: It cancelled the long-planned Christmas issuance of a “Three Wise Men” commemorative silver coin, and a second (less-festive) silver token celebrating monorails.

The reason? Silver prices surged in October to hit US$53 per ounce, a level where “the material value of the German 20 euro (S$30.30) and 25 euro silver coins currently exceeds their respective face value by a significant margin”, as the finance ministry explained. In plain English: Issuing those coins no longer made economic sense.

Since then, silver prices have continued to soar. Indeed on Wednesday (Dec 10), the silver price hit US$63.86 per ounce – nearly double its level a year ago – after the Federal Reserve trimmed rates by 25 basis points.