Investors were recently taken by surprise when silver prices surged skywards and then they were equally taken aback (most lost money) when they headed South. Now, it seems, the tide is changing towards the positive for those interested in the commodity.
Silver prices, deeply dented but unbroken by a rout in May, will climb steadily through the second half of the year as investors buy the metal as an alternative to expensive gold.
* Silver prices underpinned by investment demand
* Spot gold hits record high at $1,589.56 on debt concerns
* Monsoon key to Indian purchases
Despite a swoon following a 60 percent rally to a peak in April, silver continues to lead the precious metals complex with a gain of 24 percent so far this year, outstripping gold's rise of 11 percent, and retains allure for inflation-wary investors.
Silver, notorious for its price volatility, stung many investors with a drop of 33 percent over six sessions in early May from a record of $49.51 an ounce on April 28.
Silver prices have held above $32 since mid-May, and are set to move higher in the second half of the year, supported by low interest rates in the United States, a sovereign debt crisis in the euro zone and inflation concerns in key emerging economies such as India and China.
Lingering fears of a sovereign debt crisis, inflationary pressures and a slowdown in the recovery continue to drive investors to look for a safe haven and hedge against uncertainty, said Ong Yi Ling, an analyst at Phillip Futures.
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