By Alistair MacDonald
When it comes to post-Brexit havens, silver has outshone gold.
After Britain voted to leave the European Union last Thursday, investors dumped shares and riskier debt and jumped into haven assets such as government bonds, the yen and precious metals.
But while gold got all the media attention, it was silver seeing more of the investors.
Since the Brexit vote on June 23, gold is up 7% on the New York Mercantile Exchange and silver is up 17%.
Historically, silver has generally outperformed gold both on the up and downside. It moves higher than gold when both prices climb and sinks further when they fall.
“It is more volatile. it tends to swing around a lot more” than gold, said Simona Gambarini, an economist at Capital Economics.
During both metals’ last big decline — from the fall of 2011 to January this year — silver lost over 70% and gold around 40%.
Now that both are rallying, it is silver that is shooting higher again. But silver still has a long way to go to catch up.
“Relatively speaking, silver is cheaper. So for people who can’t afford gold look at silver,” said Xiao Fu, head of commodity markets strategy at BOCI Global Commodities (U.K.) Ltd.
Safe-haven demand has been a key reason for both metals’ current rally. But the relative attractiveness of these metals is also affected by U.S. Federal Reserve policy. Precious metals find it harder to compete with yield-bearing assets when rates are increasing, and that prospect has receded in recent months.