Is silver the new gold?
The surge in the precious metal’s price could have ominous implications for the markets
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[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.
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