Silver struggles to keep up the pace with gold

• Silver is underperforming its sister currency, gold. 
• Industrial demand has plummeted, weighing on silver prices. 

XAG/USD is currently trading at $14.9708, flat on the day having recovered from its worst levels within the day's $15.1690 and $14.8521 range. We are in a positive precious metals environment considering the ballooning central bank balance sheets and fiscal deficits, although silver is the laggard. 

Besides these ballooning central bank balance sheets and fiscal deficits, an old friend to safe havens has reared its ugly head again this week – trade wars are back with vengeance.  The US administration is insisting on accusations that the virus originated in a laboratory in Wuhan, Central China's Hubei Province. More on that here: Pompeo and Trump ratcheted up US and China tensions. This was a catalyst for a number of subsequent headlines, stoking the flames of war between China and the US. 

Silver lags gold at times of risk-off themes

However, what should be noted is that during the 2018 and 2019 trade wars, silver did not perform. Instead, gold rallied in the middle of the trade spat. It wasn't until late in the day when silver started to play catch-up with gold in the summer of 2019. Prices collapsed during the COVID-19 burn-out with the USD rallying towards the 104 handle in the DXY. In fact, the ratio of gold-to-silver prices is currently around 113 as gold starts to pick-up the baton again. Given how industrial demand has plummeted due to coronavirus (COVID-19) shutdowns, silver will always likely struggle in such an environment. 

Silver levels