THE SILVER TRAP

A GOOD STORY CAN ALSO HURT WHEN TIMING IS NOT RIGHT

The entire financial and commodity markets are excited with the rise and rise of Silver.
Everywhere you look — TV, YouTube, WhatsApp groups — one line keeps echoing:
“Silver will hit $100 soon!”

This blog has been pushing/nudging for SILVER investment at regular intervals since 2022 January
starting with when Silver was Rs.58,000 per kilo. 

Silver’s long-term story sounds powerful — Electric Vehicles need it, Solar Panels consume it, Electronics can’t do without it, and global supply is tight. But before you get carried away by the noise, pause and ask yourself   —   does a great story always mean a great entry point?
One more question you should ask yourself is...
Do I really need Silver in my portfolio or I want to buy just because everyone is buying?
We have already seen so many assets, stock prices sucking gullible investors with this kind of FOMO. So, a rethink, a pause before committing is a must! 

HISTORY OF SILVER PEAKS :
Every time Silver has touched $49–$50 per ounce, it has crashed badly.
In 1980, it fell 92% after a crazy rally.
In 2011, it fell 73% after the QE boom.
And now, 2025 — we are again near that same level but WITH ONE BIG DIFFERENCE!
This time, silver does have genuine industrial tailwinds — EV batteries, solar panels, electronics, and green energy.
However, even strong long-term fundamentals don’t protect you from short-term excesses. When price runs far ahead of demand, even the best stories can turn into expensive lessons when timing is wrong.

TOO FAST, TOO SOON
Silver went from $20 to $49 in just 1 year.
Such a scorching price rise even with a valid reason.. calls for deeper research. Even if it deserves to rise, the speed at which it has risen calls for caution, not celebration.
Every market, whether it’s real estate, gold, or crypto, moves through four predictable phases: — accumulation → enthusiasm → euphoria → exhaustion.

No, this doesn’t mean Silver will crash tomorrow.
But it’s quite possible that we may see:

• A Time Correction (sideways movement for months) and

• A Price Correction (a dip before stabilizing again).

Remember — nothing grows in a straight line, especially in commodities.

FUNDAMENTALS COULD CHANGE
Change in fundamentals could change the Sentiment in Silver.
Interest Rate Impact:
The US might delay rate cuts. A stronger Dollar usually pushes Silver prices down.

Industrial Slowdown:
     EV growth is slowing, China’s manufacturing data is weak, and solar expansion is flattening. That means industrial demand may not justify current prices.

Gold–Silver Ratio Warning:
      Historically, when this ratio widens, Silver tends to underperform Gold — and that’s happening again.

In short, there’s more excitement than earnings behind this rally.

Watch : https://youtu.be/OObgOZwp_Rk

EUPHORIA EVERYWHERE
When everyone including my driver and maid are giving “Silver Tips,”
that’s often a sign the top is near.
When the crowd is excited, the wise quietly step back.

WHAT STRATEGY MAKES SENSE NOW?
If history has a voice, it says —
Every time Silver looks unstoppable, it soon stops hard.
Don’t chase headlines. Stay Calm. Stick to Asset Allocation. Dont Forget Diversification. Discipline Always beats excitement.
Remember: Past peaks of greed became future points of regret.
Focus on long-term, diversified investments (like SIPs in mutual funds), not quick riches.

Still want to buy Silver? Consider Systematic investment way to average your purchase cost. Yes, Silver may shine in the long run — but not every shine is a signal to jump in.

Regards,
Srikanth Matrubai
AMFI Registered Mutual Fund Distributor
Disclaimer: This post is for educational purposes only and not investment advice.
hashtag#DontRetireRich

All the best,
Regards,
Srikanth Matrubai

MUTUAL FUND DISTRIBUTOR

REBALANCE VOLATILITY CERTIFIED COACH

Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH

You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here are the author's personal views and should not be interpreted as a recommendation to invest/avoid.

 

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