Editor’s Note
The recent sharp decline in silver prices, coupled with ongoing volatility in gold, underscores the continued turbulence within the precious metals market. This article examines the drivers behind these significant price movements.
Volatility in the commodity market is far from over. While it seemed that the waters had calmed in recent sessions, today silver has again recorded significant declines, with its ounce price falling more than 16% at some points in the early morning. At midday on Wall Street, the metal is down 10%, around $75.
This movement is reflected, as always, in gold, which is also suffering declines, although – as has been the case until now – its fluctuations are less pronounced, with declines barely reaching 3.5% during the most delicate moments of the session. At midday in the US, it is down 1.3%.
Part of this short-term volatility is due to investors unwinding their positions in exchange-traded products, they note, but “structural factors remain intact and we still expect an upward recovery.”
The strong movements of gold and silver in recent sessions have again highlighted the enormous discrepancy among analysts regarding precious metals valuations. While Deutsche Bank sees the ounce of silver rising nearly 40% from current levels to the $110 they expect it to reach by mid-year, other analyst houses like Swiss Julius Baer forecast it will end up falling more than 35% to trade around $56 by mid-year.
From its historical highs, silver has accumulated a decline of over 30%, which, however, does not erase its annual gains. Indeed, last week was the most bearish week for silver since 2011, with its ounce plummeting more than 17%, and this week is on track to match that level of decline: it is already down 9%.