Solomon Global analyst expects silver to continue rising to multi-year highs

Despite reaching a resistance level of $39 per ounce, silver has the potential to rise to new peaks, according to Solomon Global analyst Nick Cowley. He predicts prices will go up to $40 per ounce before reaching the August–September 2011 highs of $43.35 and $44.24.

Cowley attributes the increased interest in silver as a raw material and a hedge against uncertainty to industrial consumption and inflation concerns in the United States. Demand for silver and gold is fueled by the weakening greenback. The analyst noted that a potential easing of US monetary policy could also positively impact precious metal prices. Currently, markets widely expect the Fed to cut rates in September.

Under these conditions, Cowley predicts that silver will reach new multi-year highs in the coming weeks. However, he does not expect silver to continue outperforming gold in terms of price growth. The gold-to-silver ratio is already 85.88, which is 20% lower than in April.