SILVER smashed through $90 an ounce today, hitting $90.52 in early morning trading, as a combination of the metal’s safe haven status amid growing geopolitical tensions and industrial use in AI data centres, electric vehicles (EVs) and solar tech added further momentum to the price. Gold also hit a new all-time high, rising above $4,600 early Wednesday.
Though some advisers urged caution, one financial expert said “triple digits may become the floor for silver, not the ceiling”, while another urged Brits “to move away from the ‘buy low, sell high’ traditional value investment perspective and buy into more of a ‘buy high, sell higher’ view.”
Safe-haven assets
Alexander Londoño, Market Analyst at ActivTrades, said: “Gold and silver have been rising because they act as safe-haven assets during periods of uncertainty.
“However, there are other factors affecting precious metals far more, such as the possibility that interest rates in the United States continue to fall during this year.”
The US Justice Department launching a criminal probe into Federal Reserve chair, Jerome Powell, is also seen by many analysts as a contributor to surging gold and silver prices.
$100 silver possible this month
Anita Wright, Chartered Financial Planner at Ribble Wealth Management, believes that while pull-backs — or price dips — are still likely, $100 silver this month is possible.
She said the Powell probe, industrial use, geopolitical tensions in Iran and Fed rate cut chatter are certainly drivers of silver’s price surge, but there are other important contributors to silver “no longer trading normally”.
She continued: “Silver is riding two waves at once: monetary demand, where gold and silver are used as money when confidence in debt and fiat currencies wobbles, as it is currently — and industrial demand, which has outpaced supply for years.
“The more important point is whether the market is leaving its old price reality behind; if so, triple digits for silver may become the floor for silver, not the ceiling. Gold’s strength fits the same monetary backdrop.
“At all-time highs, caution is sensible but waiting for the perfect dip can mean missing the move.”
Metal momentum
While many financial advisers urge caution about buying into silver and gold at current highs, David Belle, Founder and Trader at Fink Money, agreed with Wright that investors waiting for a dip may miss out on momentum.
He said: “Precious metals have momentum right now — and then some. Investors, especially British investors, need to move away from the ‘buy low, sell high’ traditional value investment perspective and buy into more of a ‘buy high, sell higher’ view.
“The one single factor that has driven the highest returns over the past 30 years in annualised terms has always been momentum — the concept that something that has rallied will continue to do so.
“As demand for industrial-based metals increases and geopolitical tensions keep rising, it’s likely we will continue to see the prices of all metals rise.
“We have a perfect cocktail of macro aligning with the systematic trend-following nature used by commodity trading advisors and systematic funds.
“Does this cause some build up of risk? Sure. But as retail investors, it doesn’t take long to exit a position when you have small capital investments. The real risk is for institutions with larger capital who can’t simply dump their positions in one go.”
Given the importance of silver in the tectonic investment shift that is AI, Belle added: “If you’re an investor betting on AI as the next big thing, then consider the metals that power it – and that includes silver.”
Higher volatility than gold
Rick Kanda, Managing Director at The Gold Bullion Company, said the price of silver has risen massively over the past year, as investors gravitate to ‘safe-haven’ assets at a time of extreme geopolitical uncertainty — and expects that demand to continue.
He continued: “Similar to gold, investing in silver bars and coins can serve as an inflation hedge as well as a portfolio diversifier. The main difference between the two is that silver comes with higher volatility than gold, as there is a much higher industrial demand, a smaller market size, and in the UK [silver] is subject to 20% VAT.
“Factors like economic uncertainty and industrial demand cause silver prices to fluctuate constantly; however, silver is much more affordable than gold, making it within reach for smaller investors.
“The lower entry price point makes silver an excellent first step for anyone looking to dip their toe into precious metals.
“You can begin enjoying the potential benefits of holding a tangible asset that acts as an inflation hedge and portfolio diversifier, while gaining valuable hands-on experience in buying, storing, and managing physical bullion without the large commitment first.”
Bubble-and-pop territory
But some experts urged caution and said what’s currently emerging could be a bubble rather than a safe bet.
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said: “The flight to silver seems less like a safety play and more like a bubble as prices keep increasing. The case based on fundamentals is out of the window with the increases seen in the last 12 months, meaning we are very much in bubble-and-pop territory.
“The world is becoming used to turbulence and eventually investors will pile out of safety plays and back into the equity market.”
