President Donald Trump’s recent imposition of tariffs has sent ripples through the silver market. The precious metal, already under pressure from a strong U.S. dollar and uncertainty around potential Federal Reserve rate cuts, now faces additional challenges. Peter Krauth, a well-known precious metals analyst and author of “The Great Silver Bull,” sees the current economic climate as reminiscent of the 1970s when silver prices soared amid high inflation.
He argues that the Fed’s prolonged policy of near-zero interest rates has contributed to the current inflationary pressures, and recent rate hikes may not be sufficient to control it. Silver performed very well in the 1970s, and I believe it has the potential to do the same again,” Krauth said in an interview. He emphasizes silver’s potential as a hedge against inflation but cautions that it is a volatile investment.
“People are well advised to know and expect that [silver] is going to be volatile,” Krauth said. “It’s going to be more volatile than gold, and if you talk about silver stocks, that’s another—you know, it’s exponentially more volatile.”
However, he believes that this volatility creates opportunity.
Trump tariffs impact the silver market
“It’s the volatility that brings the opportunity,” he added. For new investors in the silver market, Krauth suggests waiting for an opportune moment to enter. “If you haven’t participated in it and they see a spike in a run-up and now they feel, ‘I’ve missed it’—well, if it was very exciting and very fast, you can almost be guaranteed it’s going to correct,” he said.
“Maybe it’s not a bad idea to wait a little bit to let things calm down.”
Krauth points to historical trends to illustrate silver’s potential returns, citing instances where silver prices tripled within a few years and mentioning companies in the silver space that saw gains of 16 to 17 times their share price within two to three years. While Krauth’s perspective offers a bullish outlook for silver, it’s important to remember that this is not financial advice. Investors should always conduct their own research before making any investment decisions.
As the global economy navigates the impact of the Trump tariffs, the silver market remains one to watch closely. With its potential as an inflation hedge and its historical performance during times of economic uncertainty, silver could offer interesting opportunities for investors who understand the risks and are prepared for the ride.