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Buoyed in early trading by a flight to safety amid simmering turmoil between Ukraine and Russia, silver prices today are showing signs of life.
In morning trading Friday, the price of silver rose $0.62, or 2.44%, at $21.89 an ounce. While the white metal slipped $0.148 Thursday to finish the session at $21.25 an ounce, the dip came on mild profit taking. Silver had a stellar showing Wednesday, ending up 2.66%, or $0.55, at $21.33.
Escalating concerns regarding the Russian occupation of parts of the Ukraine, and the ensuing global threats flying back and forth, have been an important catalyst for higher silver prices over the week.
Additionally, a recent spate of soft U.S. economic data has caused investors to seek refuge in silver.
"The premium for gold and silver has increased as people are nervous about U.S. growth," David Meger, director of metal trading at Vision Financial Markets, told Bloomberg. "The turmoil in the currency market has also pushed people toward precious metals."
Also stoking silver demand are concerns over a bond default in China (the world's second-largest economy), plus mounting anxieties the Asian nation's recovery will be more difficult than first thought. Thursday, Bank of America Corp's Hong Kong-based economists cut their first quarter growth forecast for China to 7.3% from 8%, and their full-year estimate to 7.2% from 7.6%.
Silver is again playing the alternative currency card and is also taking up its familiar stance as a safe-haven asset amid growing global uncertainties. With market participants unsure of what to expect, there has been a notable flight from risk-on to risk-off trades.
Indeed, precious metal traders have accumulated long positions ahead of this weekend's crucial vote in Ukraine.
Sunday, Ukraine's citizens will cast ballots for or against Crimea uniting with Russia. Russia has said it will recognize the outcome. The rest of the world has said it won't.
Whatever the results, tensions will definitely flare up.
It's exactly those kinds of situations that experts cite for why they always hold some physical silver in their portfolios.