The global financial crisis is just around the corner. The “minor” crisis caused by growing inflation and the energy crisis due to the war in Ukraine will now be further aggravated by the situation with the banking sector in the USA and the Swiss giant Credit Suisse.
In the last few days, the capital market on Wall Street has been shaky – investors are cautious, and the main stock indexes are, for now, in a slight decline. In contrast, risky assets, such as cryptocurrencies, are growing.
Also, there is growing interest in gold, which represents the traditional “refuge” of investors and historically records growth in times of crisis. But what is the current situation in the investment silver market?
Silver experienced a major decline in value last week, just a month after the white metal tried to move to new annual highs. However, such developments are not at all surprising.
According to analysts at Investing.com, silver is known in investor circles for its “short-term false spikes against gold,” so the decline was in line with earlier trends. However, it can be a good signal for the medium term.
What is the relationship between gold and silver?
The entire sector of precious metals, led by gold, should rise in price in the coming period. The cause of this is economic instability, war conflicts and high inflation, which currently dominate the market. Forecasts from the world’s leading authorities, among more than 20 different sources we compared, expect gold to rise in 2023, with the consensus that gold will move above $2,000 per ounce.
Many analysts believe that gold could reach a new high of between 2,100 and 2,500 dollars per ounce, a rise of 10 to 30 per cent more than the current price. Some optimists predict that gold could go up to as high as $4,000 per ounce, double its current rate.
Central banks worldwide have driven strong gold demand growth, resulting in an increased price. And the connection with silver has always existed.
Silver behaves similarly to gold in the investment sector, with a certain ‘phase shift’. First, the price of gold rises, and then silver growth follows. They do not always rise at the same speed, but historically gold and silver prices tend to maintain a stable relationship. Now that ratio is about 1:90 (1 gram of gold is worth about 90 grams of silver). In previous situations, when that ratio exceeded 1:80, a strong jump in the value of silver would occur – from 40 to even 400 per cent.