BCR launches two certificates for investing in silver

Tomorrow, the Romanian Commercial Bank (BCR) will launch two investment certificates which track the evolution of silver, amid interest from its customers, as the price of the metal has significantly climbed over the past year.

"We have decided to list two certificates on the Bucharest Stock Exchange, Turbo Long and Turbo Short", said Răzvan Furtună, the head of the Department of Treasury Products Sales to Retail Customers of BCR. He added: "These financial instruments are first and foremost aimed at speculators looking to profit from the high volatility of the underlying asset (silver), which in the case of turbo certificates is also amplified by the existence of leverage".

According to Răzvan Furtună, there is no minimum amount for investing in these certificates.

For the time being, BCR does not intend to launch any other silver-based products, even though, depending on market conditions, "we can build medium term investment solutions in baskets of products that would include silver", Mr. Furtună added.

Romanian investors are interested in the silver market, said Răzvan Furtună, who mentioned that the products launched by BCR offer investors the opportunity to test a new financial instrument at a very low cost.

Răzvan Furtună added: "Silver is a commodity that is widely used in the industry and which has high potential for new technologies. Unlike other goods, the potential for gain is extremely high, but at the same time, risks are also higher".

This year, the price of silver rose from 30.68 USD to 48 USD at the end of April, followed in May by a strong correction all the way to 35 USD, said Mr. Furtună, who stressed that the evolution of the price of silver depends on demand from the industrial sector: "Silver is a precious metal which is widely used for industrial purposes. Unlike gold, in the case of which only 10% of the annual output is used by the annual production, in the case of silver half of that output is intended for industrial applications and new technologies".

According to the statements of Mr. Furtună, high volatility is caused precisely by the strong industrial component of the price, and positive or negative news in this area are those that are affecting the price of silver to such an extent.

The complexity of this metal is what makes the evolution of price so interesting, while at the same time so hard to predict, Răzvan Furtună concluded.