It moved a lot lower, practically erasing its recent upturn. Not surprisingly: the rally was based on an unfounded expectation of an accommodative 180-degree turn from the Federal Reserve, which is unlikely to happen anytime soon. I still have good reason to believe that silver is an undervalued asset compared to other investments. The dollar and, consequently, the sharp fall in inflation expectations broke the centuries-old fall in silver that began in the first quarter, slightly below the current Live Silver Price (about 1 percent lower) and well below the year's previous silver high. Historically, compared to other major investment assets, silver would continue to be relatively undervalued at this price level.
For its part, Tiggre believes that current market circumstances are conducive to silver surpassing gold and perhaps reaching triple-digit levels. Matt Watson, founder of Precious Metals Commodity Management, believes that, over the next decade, silver will greatly benefit from increased industrial demand, in particular from the electric vehicle, solar photovoltaic and electronics industries. It is also in line with data from the Silver Institute, which predicts that silver will continue to have a global supply deficit in the coming years. In addition to the established industrial uses of silver in the field of electronics and medicine, silver will also play an important role in the industries of the future.
In addition, if the global economy falls into recession this year, industrial demand for silver could also be affected. However, this type of fall in silver is most likely to rob the Federal Reserve of a buzzword regarding the inflation transition. While the time period of each cycle may vary, this concept is useful for evaluating the general direction of the prices of various assets. When the demand for silver remains the same and yet there is more money in the economy looking for the same amount of resources, the nominal price of those resources increases.
Therefore, one of the driving forces behind the increase in silver prices over the next five years is the numerous applications of white metal in green technologies and the green economy. Although Neumeyer believes that we must break the ties between silver and gold, the reality is that most of the same factors that shape the price of gold also move silver.