In an uncertain global context, investors seek to protect their capital. The behavior of precious metals may be a preview of what is to come for bitcoin. Although silver has not hit new all-time high prices this year like gold, it is in a marked uptrend. This makes various specialists think that this precious metal will continue to make profits. “We are bullish on silver,” Citi bank recently said in a statement about its view of the commodities market. He clarified, through the report, that his objectives per ounce for the end of 2024 and mid-2025 are 35 and 38-40 dollars (USD), respectively. Currently, an ounce of silver is trading at $31. According to the bank, silver plays crucial role for Chinese economy through energy transition. He warns in this regard that, with the promotion of solar energy and electric vehicles, among other related factors, the demand for the metal may be boosted. In addition to this, there is another key factor that enables the rise of the metal, according to Citi. This is “an increase in retail demand for silver potentially as a store of value,” he details. He attributes this to the context of weak real estate markets, weak consumer confidence and gold prices already at all-time highs. With such a panorama, the bank stands out These dynamics put silver in a unique positionbenefiting from both the growth in industrial demand and the interest of retail investors. For silver market specialist Peter Krauth, who has 20 years of trading experience, Citi's outlook should be taken with caution. “Is this a contrary signal that makes us be cautious in the short term?” he asks. With this question, Krauth suggests that Strong bullish market sentiment towards silver could be a warning sign. In financial markets, when an optimistic opinion becomes very dominant, it can mean a contrary signal, that is, it could be close to an inflection point. In this context, the specialist invites us to consider the possibility that the market is overbought in the short term, which could lead to a price correction. These comments take place while The ounce of silver reached almost USD 33 this monthits highest in more than a decade. Precisely, it had not touched this price zone since 2012. With this, as the following graph shows, it was 34% from the historical record of USD 50 that it reached in 2011.
Silver price per ounce since 2010. Source: TradingView. According to renowned precious metals analyst and investor, Jesse Colombo, Citi's forecast is not a sign to be cautious. “That's what happens in a bull market… and it's still very early,” he believes. “The time to worry is at the extremes of sentiment, but we are not seeing that,” adds Colombo. In fact, he sees that “many people are cynical about silver,” as reflected in the contrasting gold market.
Gold has not stopped breaking new price records this year
Unlike silver, the price per ounce of gold hit a new record last month of almost USD 2,690. In addition, it has been setting new historical highs since a year ago, when it broke the lateral stage that it had maintained since 2020, the year in which it surpassed its 2011 levels. This can be seen below
Gold price per ounce since 2010. Source: TradingView. This occurs amid the uncertain global environment, with the escalating war between Israel and Iran and interest rate cuts reducing the value of the dollar. Faced with uncertainty, investors seek to protect their capital in assets that are not linked to particular economies such as precious metals.
The behavior of these commodities may be a preview of what is to come for bitcoin (BTC), a currency classified by many as “digital gold.” This is because this asset is also scarce and its issuance is done through decentralized mining. Although, for the moment, its price has remained at a sideways stage for seven months. “Growing geopolitical tensions and the upcoming elections in the United States are likely to reinforce what some investors call 'downgrade trading', thus favoring both gold and bitcoin,” analysts at JP Morgan bank commented last week. Downgrade trading refers to an investment tactic to protect or profit from uncertainty and expectations of instability. Meanwhile, The stock markets in the United States have recorded new price records in the last monthsomething that does not usually happen in bullish gold trends. Therefore, as BitcoinDynamic reported, there are diverse feelings about the economy in the current environment that could become more clear in the face of economic and political development.