By Ion Jauregui – ActivTrades Analyst
Gold, historically relegated to the background of investment strategies, is now emerging as a first-rate asset. This change is due to factors such as rising inflation, the implementation of aggressive tariff measures, and the geopolitical tensions that have intensified in recent years. The war in Ukraine and the consolidation of strategic alliances among Russia, China, and the BRICS countries have contributed to placing gold at the center of attention, demonstrating that its safe-haven nature is more necessary than ever.
One of the key elements in this transformation is the adoption of Basel Three regulations. This agreement, by classifying gold as a “tier one” asset, equates its value and security with that of US Treasury bonds. It is expected that, after its implementation in Europe in 2026, the same measure will be extended to US banks in 2027, which will increase institutional demand and further consolidate gold as a secure reserve in times of uncertainty.
Tariff policies, driven in part by decisions such as those of the Trump administration, generate inflation and increase economic uncertainty. Such a scenario forces banks and large investors to rethink their strategies, seeking in gold a refuge against the devaluation of other assets. The convergence of these factors suggests that the price of gold could reach, or even exceed, levels of $4,000 – it is even projected to reach $4,500 – as the increasing money supply pushes the valuation of the metal.
The Duality of Silver: Industry and Investment
Unlike gold, silver possesses a duality that makes it both an essential raw material for industry and an investment asset. While approximately 70% of annual silver production is allocated to industrial and manufacturing processes, the remainder is used in bars, coins, and ETFs. This characteristic creates inherent volatility, as movements in the economy directly affect its industrial demand.
During periods known as “fear trades,” when economic uncertainty spikes, silver tends to behave as a proxy for gold. Historically, compressions in the Gold/Silver Ratio (GSR) have been observed during these episodes, which in some cases have driven silver to experience abrupt price movements. Furthermore, the growing concern about market scarcity—due to a deficit between production and demand that could exceed 200 million ounces this year—adds another layer of complexity to the scenario.
Regulatory uncertainty exacerbates the situation: faced with the possibility of governmental interventions to “normalize” prices—for example, by banning ETFs or other forms of investment—silver could experience temporary declines. However, these interventions could be offset in the medium term by accumulated demand from investors eager to protect their assets in an environment of increasing instability.
Investor Strategy: The Pyramid Approach
There are a variety of experts who suggest that the strategy to navigate this volatile environment is the pyramid approach in investments in precious metals. At the base of this pyramid are the physical assets: the acquisition of gold and silver in the form of bars or coins represents the first line of defense against uncertainty and inflation. Gold, due to its role as a store of value, offers stability, while silver—with all its potential for revaluation in “fear trades”—adds dynamism to the portfolio. On top of this base, investment is complemented by mutual funds, ETFs, and stocks of mining producers and developers. Solid producers have historically generated the majority of returns, while developers, with high growth margins, offer opportunities to leverage market movements. This diversified structure helps manage risk and capitalize on both the stability of gold and the explosive potential of silver in times of tension.
Speculative Strategy
As throughout history there have always been speculators in the market, and derivatives trading is just one way to speculate, this type of trading obviously has a shorter time frame than that of the investor, but it facilitates quick entry and exit in the metals market. It clearly minimizes the risk of prolonged exposure, and the potential profits tend to be higher as well as the risks, due to leverage when trading with derivatives.
Silver Analysis (Ticker AT: SILVER)
Observing the silver chart, since Valentine’s Day, in February of last year, the asset has been climbing its price until October 2024, when its ascent stalled. Later, in the last week of March, the asset attempted to push its price above the highs established at $34,845 without success. After the “Trumpazo” tariff move triggered last Friday, its value fell back to $28,314, and this week we see how it has held the support at $28,768 and seems to have halted its decline. At this moment, the RSI is highly oversold at 33.38%, its current Point of Control (POC) is located around $30,556—a price it touched in yesterday’s session. The crossover of the 50-day moving average above the 100-day moving average occurred on January 31 on the daily chart, so if this trend does not change, it will continue supporting this expansion over the 200-day average. It is very likely that the precious metal will return to a recovery path, but this is highly dependent on the situation that may arise with gold as a reserve asset. If this price is not supported and the averages cross downward, we could see a correction to the price zone of $27,198. However, it should be noted that this support has been touched twice and it could be tested again at some point if the downward pressure continues.
Conclusion: Fear as the Driving Force of the Market
The current environment, marked by geopolitical and economic uncertainty, has turned fear into a determining factor for the behavior of precious metals. Gold, now considered a first-rate asset and backed by measures such as Basel Three, is emerging as a safe haven with projections that could exceed $4,000. On the other hand, silver, despite its volatility and industrial use, acts as a proxy for gold during “fear trades,” where its abrupt movements offer opportunities for investors. In short, this context underscores the importance of a diversified strategy—combining physical assets and derivatives trading—to protect wealth and take advantage of potential revaluations when fear drives the market.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Gold, historically relegated to the background of investment strategies, is now emerging as a first-rate asset. This change is due to factors such as rising inflation, the implementation of aggressive tariff measures, and the geopolitical tensions that have intensified in recent years. The war in Ukraine and the consolidation of strategic alliances among Russia, China, and the BRICS countries have contributed to placing gold at the center of attention, demonstrating that its safe-haven nature is more necessary than ever.
One of the key elements in this transformation is the adoption of Basel Three regulations. This agreement, by classifying gold as a “tier one” asset, equates its value and security with that of US Treasury bonds. It is expected that, after its implementation in Europe in 2026, the same measure will be extended to US banks in 2027, which will increase institutional demand and further consolidate gold as a secure reserve in times of uncertainty.
Tariff policies, driven in part by decisions such as those of the Trump administration, generate inflation and increase economic uncertainty. Such a scenario forces banks and large investors to rethink their strategies, seeking in gold a refuge against the devaluation of other assets. The convergence of these factors suggests that the price of gold could reach, or even exceed, levels of $4,000 – it is even projected to reach $4,500 – as the increasing money supply pushes the valuation of the metal.
The Duality of Silver: Industry and Investment
Unlike gold, silver possesses a duality that makes it both an essential raw material for industry and an investment asset. While approximately 70% of annual silver production is allocated to industrial and manufacturing processes, the remainder is used in bars, coins, and ETFs. This characteristic creates inherent volatility, as movements in the economy directly affect its industrial demand.
During periods known as “fear trades,” when economic uncertainty spikes, silver tends to behave as a proxy for gold. Historically, compressions in the Gold/Silver Ratio (GSR) have been observed during these episodes, which in some cases have driven silver to experience abrupt price movements. Furthermore, the growing concern about market scarcity—due to a deficit between production and demand that could exceed 200 million ounces this year—adds another layer of complexity to the scenario.
Regulatory uncertainty exacerbates the situation: faced with the possibility of governmental interventions to “normalize” prices—for example, by banning ETFs or other forms of investment—silver could experience temporary declines. However, these interventions could be offset in the medium term by accumulated demand from investors eager to protect their assets in an environment of increasing instability.
Investor Strategy: The Pyramid Approach
There are a variety of experts who suggest that the strategy to navigate this volatile environment is the pyramid approach in investments in precious metals. At the base of this pyramid are the physical assets: the acquisition of gold and silver in the form of bars or coins represents the first line of defense against uncertainty and inflation. Gold, due to its role as a store of value, offers stability, while silver—with all its potential for revaluation in “fear trades”—adds dynamism to the portfolio. On top of this base, investment is complemented by mutual funds, ETFs, and stocks of mining producers and developers. Solid producers have historically generated the majority of returns, while developers, with high growth margins, offer opportunities to leverage market movements. This diversified structure helps manage risk and capitalize on both the stability of gold and the explosive potential of silver in times of tension.
Speculative Strategy
As throughout history there have always been speculators in the market, and derivatives trading is just one way to speculate, this type of trading obviously has a shorter time frame than that of the investor, but it facilitates quick entry and exit in the metals market. It clearly minimizes the risk of prolonged exposure, and the potential profits tend to be higher as well as the risks, due to leverage when trading with derivatives.
Silver Analysis (Ticker AT: SILVER)
Observing the silver chart, since Valentine’s Day, in February of last year, the asset has been climbing its price until October 2024, when its ascent stalled. Later, in the last week of March, the asset attempted to push its price above the highs established at $34,845 without success. After the “Trumpazo” tariff move triggered last Friday, its value fell back to $28,314, and this week we see how it has held the support at $28,768 and seems to have halted its decline. At this moment, the RSI is highly oversold at 33.38%, its current Point of Control (POC) is located around $30,556—a price it touched in yesterday’s session. The crossover of the 50-day moving average above the 100-day moving average occurred on January 31 on the daily chart, so if this trend does not change, it will continue supporting this expansion over the 200-day average. It is very likely that the precious metal will return to a recovery path, but this is highly dependent on the situation that may arise with gold as a reserve asset. If this price is not supported and the averages cross downward, we could see a correction to the price zone of $27,198. However, it should be noted that this support has been touched twice and it could be tested again at some point if the downward pressure continues.
Conclusion: Fear as the Driving Force of the Market
The current environment, marked by geopolitical and economic uncertainty, has turned fear into a determining factor for the behavior of precious metals. Gold, now considered a first-rate asset and backed by measures such as Basel Three, is emerging as a safe haven with projections that could exceed $4,000. On the other hand, silver, despite its volatility and industrial use, acts as a proxy for gold during “fear trades,” where its abrupt movements offer opportunities for investors. In short, this context underscores the importance of a diversified strategy—combining physical assets and derivatives trading—to protect wealth and take advantage of potential revaluations when fear drives the market.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.