Silver has recently come under even more pressure than Gold, Commerzbank’s commodity strategist Carsten Fritsch notes.

Silver price loses around 8% since Wednesday

“The Silver price has lost around 8% since Wednesday last week and is trading at less than $29 per troy ounce, its lowest level since the end of June. As a result, the Gold/Silver ratio rose to 83, a level last seen in mid-May. Silver usually follows the price movements of Gold disproportionately. However, this has recently only applied to the downside.”

“The previous upward movement in Gold following the US inflation figures was more or less ignored by Silver. Accordingly, the Gold/Silver ratio was already rising before the recent price slump. The relative weakness in Silver is likely due to the weakness in base metals.”

“This is because industrial applications are expected to account for almost 60% of Silver demand this year, according to the Silver Institute. The largest part of the increase in industrial Silver demand is expected to come from photovoltaics, which is why the negative price reaction in silver seems exaggerated.”