Silver prices: a pessimistic scenario that challenges those optimistic about the rise of the white metal

Silver prices have witnessed an unprecedented rise over the past weeks, exceeding the $100 per ounce barrier for the first time in history, reaching $113.25 last January, before retreating to the $70-80 per ounce range this week.

Has silver’s luster gone off?

Marko Kolanovic, former chief strategist at Silver, presents "JP Morgan"a pessimistic analysis, in which it is expected that Silverwill trade at about half its record price this year.

Kolanovic believes that the silver market is witnessing a speculative fever that is destined for a violent collapse, pointing out that looking at history, we find that in the 1970s, gold prices witnessed a meteoric rise from $40 to $200 before falling by 50%, which led to the exit of small investors, and he believes that silver may repeat the same thing. "Psychological trap" Today.

Structural distortions in price action

Many analysts agree that the current price action in Precious metals looks "Fragile" or "Distorted"as a result of unprecedented fluctuations driven by unbridled liquidity flows more than actual physical supply and demand.

Confirms Maximilian Tommy, an analyst at the company "Galena Asset Management" Fundamentals alone cannot explain a 200% rise in a commodity.

Tommy believes that the dual nature of silver (a safe haven and an industrial metal at the same time) is the main source of distortion.

Optimism in the rise

Despite the warnings, supporters of the continued rise see that there are strong fundamental factors supporting the market, on top of which is the continuing structural deficit, as the Bank expects "HSBC" breadth Structural silver deficit to reach 1.2 million ounces this year, providing essential support under a speculative bubble.

Optimists also cite record industrial demand, as the shift toward solar energy and electric cars has sucked up the supply of silver in ways it did not in previous cycles, making it "Industrial metal for contract".

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