Silver Looks Relatively Cheaper Than Gold Amid Mixed Prices
Gold and silver prices on MCX were mixed on September 8, influenced by a softer US dollar and expectations around US monetary policy. The Multi Commodity Exchange (MCX) October gold futures traded at ₹1.53 lakh per 10 grams, up 0.14%, while December silver futures stood at ₹2.38 lakh per kg, down 0.08%.
A softer dollar can support both metals by making dollar-denominated commodities relatively cheaper for holders of other currencies. However, the two precious metals are telling different stories with their price action and relative valuations.
An analysis by Monarch PMS found that gold's modelled fair-value range is $3,248-$4,595 an ounce, with a midpoint of $3,922 an ounce. At around $4,242 an ounce in early August, gold was already about 8% above this midpoint.
The same analysis showed that the silver's relative valuation is different as it estimates a silver range of $54-$77 an ounce, with a midpoint of $65. At around $61.7 an ounce, silver was about 6% below this midpoint, making it relatively cheaper than gold on the firm's valuation framework.