Silver Price Surge: Experts Warn of Upcoming Crash
Silver prices have witnessed a significant surge, reaching record highs that have caught the attention of both investors and market analysts. Recently, silver reached an astonishing $82.670 per ounce in the international market, only to experience a dip to $71.300 per ounce due to profit booking. This volatility raises concerns about the sustainability of these high prices, particularly as experts warn of a potential crash of up to 60% by the end of FY27.
The recent rise in silver prices can be attributed to multiple factors, including increased industrial demand and supply constraints. Companies are now shifting from lithium-ion batteries to solid-state batteries, which has raised the demand for silver. However, disruptions in supply from key exporting countries like Peru and Chad, coupled with geopolitical tensions, have created a complex market landscape for silver.
Experts, including Amit Goel, Chief Global Strategist at Pace 360, highlight that industries will seek alternatives if raw material costs become unmanageable. Already, photovoltaic cells and solar panels are transitioning from silver to copper, and similar trends are emerging in battery technology. This shift poses a significant threat to silver's long-term demand.
Historical trends suggest that significant price rallies in silver often precede steep declines. Anuj Gupta, Director at Ya Wealth, points to past events in 1980 and 2011 when silver prices plummeted after reaching peaks. Such historical patterns indicate that the current market may be nearing its peak, prompting investors to reconsider their positions.
Looking ahead, market experts predict that silver prices may continue to fluctuate in the short term due to institutional short covering. However, the long-term outlook suggests that by the end of FY27, silver could settle around $40 per ounce if it peaks near $100 levels. Some analysts even believe that silver might have already reached its maximum price level, potentially dropping to around $35 per ounce.
In conclusion, while the recent surge in silver prices may appear promising, the underlying dynamics of the market suggest caution. Investors should carefully evaluate their positions and consider the potential risks associated with holding onto silver in the face of rising alternatives and historical precedents. As always, it is advisable for investors to consult certified experts before making any significant investment decisions.
