The recent financial news has undoubtedly caught your attention, especially the record highs reached by the gold price. If you missed this news, please feel free to read my previous newsletter, where I discuss some of the key factors behind this price increase. But what about the silver price now that gold is reaching unprecedented heights? Since February 27, the price of silver has risen by 10%, from €665 to €735 per kilogram, while the gold price has increased by 6% in the same period. Although gold is in the spotlight, silver is still a considerable distance from its record price in 2011 of €1,050 per kilogram, currently lagging by about 45%.

The correlation between gold and silver remains noticeable, with the current gold/silver ratio at 86. This means that gold is currently 86 times more expensive than silver, measured in the same volume. For comparison, this ratio was 30 in 2011. If we were to apply that ratio to the current market, with a gold price of €63,750 per kilogram, silver would be priced at €2,125 per kilogram!
The recent developments in the silver market, which I detailed in the newsletter of February 29, confirm that silver remains an attractive investment option.

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On Tuesday, March 12, the latest inflation figures in the United States were announced, showing an increase to 3.2%, slightly higher than the forecasted 3.1%. This marks a continued period of high inflation, which has not fallen below 3% since April 2021. Despite interest rate hikes by the Federal Reserve (Fed), inflation remains stubbornly high. Nevertheless, the market still expects a possible interest rate cut during the next Fed meeting on June 12, with a probability of 68.7%. The current interest rate stands at 5.25%-5.50%.

Jerome Powell, the Fed Chairman, is in a difficult position. The United States is currently facing annual interest payments of over $750 billion on a national debt that has risen to $34 trillion, a tripling since 2008 when the debt was still $10 trillion. This situation undermines confidence in the US government and the dollar.

In this climate, gold, which has been seen as a reliable investment for centuries, seems to benefit from the uncertainty. With the US presidential elections on the horizon in November, this year promises to be an exciting period for financial markets and investors.

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