DUBAI (Commodity Online): Even as gold markets show bullish tendency, silver is also on way to higher levels in The Gulf nations with the launch of a new silver ETF.

According to market analysts, silver is firming up and its price is expected to increase on the back of declining mine output and a rise in its demand in the renewable energy sector.

Silver markets reacted positively to the launch of a new exchange-traded fund (ETF) — the ETFS Silver Trust.

Silver was priced at $14.05 an ounce in Dubai markets and it is expected to move to $15.40 an ounce in a few weeks’ time.

Experts forecast that the medium- and long-run forecast for the metal is bullish. Silver gained 3.35 per cent this week, as the industrial precious metal reacted to strength in gold and copper.

According to analysts, the rally has extended to $14 with the market buoyed by news of the launch of a new silver investment product, which will boost physical offtake and could impact silver lease rates in London as the metal is allocated out of the pool of liquidity. On the charts there is a band of resistance located between $14.10 and $14.35 that should contain the current move, however, if the price can clear this hurdle, chart watchers will be eyeing a move to $15.40.

Most of the silver in Dubai is currently being traded in the spot markets. There is certainly a possibility the futures market will improve.

Unlike gold, which is increasingly assuming the form of a global currency and as an investment option to hedge against inflation, about two-thirds of silver demand comes from industry.

The metal is used in fields as diverse as making solar cells and photographic films to medication. The rest of the demand for this precious metal comes from jewellery and recycling.

Much like gold, silver markets have gained from the launch of ETFs. While the markets reacted positively to the launch of ETFS Silver Trust, the other prominent ETF, the iShares Silver Trust, trades on average 8.8 million shares at the New York Stock Exchange.