Barron's: Silver and Nickel Outshine Gold to Score Biggest Commodities Gains Since June

Article by Myra P. Saefong in Barron's

Metals took the spotlight in the third quarter, with silver and nickel shaking off worries over a slowdown in the global economy to score the largest percentage gains among major commodities since the end of June.

It’s been a strong year for metals, “but the drivers have been different,” says Gregory Leo, chief investment officer and head of Global Wealth Management at IDB Bank.

Nickel is “much more impacted by supply and demand,” he says, and while those factors also influence gold and silver, the two precious metals also respond to the market uncertainty and the U.S. dollar exchange rate.

Silver’s rise is also impressive, with most-active Comex futures contract prices up about 17% for the quarter, at $17.912 an ounce on Thursday.

Silver’s quarterly rally helped it catch up with gold’s year-to-date price gain, with silver futures up 15% versus gold’s 18% rise for the year, as of Thursday.

Both metals are “real assets that benefit from economic and political uncertainty,” says Maria Smirnova, senior portfolio manager at Sprott Asset Management. But silver has a lower price point and is also a much smaller market “so it takes less dollars to move the price,” she says. Given that, it “usually outperforms gold in bull markets.”

In the coming months, Spina says silver could build a strong base around $18, with $20 to $21 as the “next major technical resistance,” and he’d be a buyer of silver at $18 or less.

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