The bull run that silver is currently experiencing, with prices rising 36% year to date, can be interpreted as the market preparing for an upcoming macroeconomic crisis event. According to analysts from the Kobeissi Letter, a global capital markets commentary, the similarity between the Consumer Price Index (CPI) behavior in 2020 and the 1970s indicates this might be the case.
While stocks have been rising in this economic context, silver – and gold to a lesser extent – has been skyrocketing, with prices up by 80% during the last two years. Silver has beaten gold’s rally, which prices increased by a little over 60% during the same period.
Assessing these rallies and the macroeconomic elements driving the markets after the recent Federal Reserve movements, Kobeissi analysts stated:
With Fed implementing a 50 basis point cut and futures expecting multiple more, could inflation come back? Perhaps markets are pricing in a material chance inflation returns.
Another factor that could pull silver prices up is the U.S. national public debt, which is expected to reach over $50 trillion by 2030. The geopolitical uncertainty also has a relevant part in this bull run, as the possibility for a recession in 2025 is still 50% with several economists warning about early signs already happening.
Others believe silver might be more interesting than gold for those seeking to leverage gold-like movements but aiming to maximize their returns. “Investors looking to enter the market for investment metals might find silver more appealing due to its lower price relative to its historical highs,” Saxo Bank analysts explained.
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