Silver Prices Rising: Fears Affecting Investors

Resurgence in the Silver Market

Silver has once again become a focal point in the precious metals market, drawing attention. Last week, the price of silver per ounce surpassed the $50 mark, reaching a new milestone after 45 years. However, following this historic rally, prices retreated somewhat due to sharp sell-offs. This precious metal, favored by analysts, has risen rapidly alongside gold, while uncertainties and fears in the markets continue to affect investors.

Comparisons with Past Periods

To understand the rise in silver, it is important to look at historical examples. The two major precious metal rallies between 1979-1980 and 2007-2011 were intertwined with global political and economic crises. The Iran hostage crisis in 1979 and the Soviet invasion of Afghanistan had driven gold prices up threefold, while silver soared sevenfold. Similarly, the financial crises post-2007 also had the same effect, quadrupling the price of silver. Analysts note that silver is approximately twice as volatile compared to gold. Contributing factors include its narrower market structure and the ability of low-volume trades to cause significant price changes.

Market Dynamics and Industrial Use

The price increases in silver are supported not only by speculative movements but also by demands from industrial applications. While its use in electronics and the medical sector continues, demand fluctuates with the influence of modern technologies such as smartphones. In short, silver is both a precious material and an industrial metal, and this versatility affects price volatility.

Investor Unease

Recently, despite the rise in silver prices not being driven by a crisis, the fear factor among investors is palpable. Particularly, some investors have begun to gravitate towards precious metals due to concerns that efforts to control the U.S. Central Bank will lower interest rates and increase inflation. Additionally, an increase in gold purchases by many central banks, aiming to distance themselves from the dollar, is another factor supporting silver prices.

Future Expectations

There is uncertainty regarding the continuation of fluctuations in precious metals. However, looking back, if bull markets persist, it is anticipated that silver could outperform gold. In the event of potential global turbulence, it is expressed that precious metals may serve as “insurance” for investors. In this context, rising financial pressures and governments pushing central banks to lower interest rates to alleviate debt burdens present significant opportunities for silver and gold.