Silver headed for a bull market in its best start to a year in more than three decades as the European Central Bank expanded economic stimulus measures, boosting demand for the metal as a store of value.
Holdings in exchange-traded products backed by the metal have posted three straight weekly gains, while U.S. government data show money managers raised their net-bullish wagers to the highest since August. An ounce of gold bought as much as 71.5 ounces of silver on Thursday, compared with an average of 58 in the past decade, signaling the white metal is inexpensive relative to gold.
The euro weakened to an 11-year low against the dollar as the ECB expanded its bond-buying program, boosting demand for precious metals as alternatives to currencies that are being revalued. A collapse in oil prices has boosted the appeal of gold amid the threat of deflation, and the price on Wednesday topped $1,300 an ounce for the first time since August.
“Silver is enjoying safe-have bids along with gold, and there is also a lot of physical buying” Frank McGhee, the head dealer at Alliance Financial LLC in Chicago, said in a telephone interview. “There is a flight to safety because of all the concerns about the economy.”
via Bloomberg 
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