(Kitco News) Silver prices are starting to catch-up to gold as investor interest is coming back to the precious metal, said Kitco Metals global trading director Peter Hug.

“Investors are starting to see value in silver,” Hug told Kitco news this week.

Hug said that he expects silver to keep rising to $19 without gold needing to do much.

“It has been lagging. But when gold broke through $1,578 and [hit] $1,607, that was an increase of roughly 3%; silver went up about 5%. Silver is starting to catch-up,” he said. “I can see silver inching up to $19 without gold doing too much from here.”

At the time of writing, March Comex silver futures were trading at $18.35, up 0.21% on the day.

Investors see opportunity at these price levels as a medium-to-longer term play, Hug added.

“We are starting to see some investor interest in silver, which was absent in the market in the past three months. There was virtually no one inserted in buying physical silver. That is starting to change. We are doing 50% more volume in silver over the past two weeks than we’ve done the last two months,” he described.

Gold’s rally this week to above $1,600 an ounce has to be explained as a fear trade based on how it has been trading in light of rallying U.S. equities and stronger U.S. dollar, Hug said.

“If you look at the markets, the U.S. dollar is strengthening against both the euro and the yen … The dollar move was probably also a safe-haven trade as people move into the dollar and the U.S. equity market. Under normal market conditions, that would be a headwind for the precious metals, especially gold. And the fact that gold is now north of $1,600 … is an indication that there is still a lot of nervousness in this market and people are putting gold and silver into their portfolios as a hedge against an economic slowdown caused by the coronavirus,” Hug explained.