Should you buy or sell silver in a financial crisis?

We have been going through an economic recession these past three years. This seems to have had a positive effect on the precious metal market. By definition, a recession does not produce conditions that aren’t conducive to an increase in economic activity not associated with rising prices of precious metals like silver. The fact is if the conditions are that bad enough they could cause a depression followed by a deflation- two of the worst things that can happen to an economy.

In the past three years, we have seen the price of gold and silver go up. Some would say we aren’t in a full-on recession yet just a financial crisis or just on the brink of one which would explain why precious metals and silver, in particular, has done so well it seemed like a good idea to sell silver. According to expert economists, metals like silver aren’t likely to go up in price during a recession because silver is used mainly as an industrial metal, and during recessions, industrial productions tend to slow down. The question is: Are we in a recession?

In the last 50 years there were 7 recessions:

  • The first recession happened in November 1969. The silver price declined by 20%.
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  • The second recession began in 1974 and by the end of the recession some 14 months later, the price of silver had declined by 36%. The price declined further until March 1976.
  • Recession number 3 began in January 1980 and last 6 months. The price of silver declined by 70% and continued to do so months after the recession had ended.
  • The fourth recession began a few months on the heels of the third year and once again the silver price had dropped by 44%.
  • In June 1990, the 5th recession hit causing the silver price to decline by 25%.
  • It would be 10 years before the next recession. In January 2001, the silver price declined by 20%.
  • The last recession began around January 2008 and the silver price had declined by 40% in 10 months. Then it began to climb and managed to reach the $50.00 peak and then took a dive to the depths of $14/oz at the end of 2015 and it happened once more in August 2018.

When silver was taking all those knocks, people were in a rush to sell silver to avoid losing more of their investment. Things are different now. The price of silver could be going up. The fact that the price of silver may not be where you would like it to be shouldn’t make you lose faith in this precious metal. Smart investors long at the long term goal, the picture at the end of it all. They do not make short-term bets because they understand that those can be risky and may not serve their needs well.

Silver is very volatile, so you never know precisely where it is headed and which of the countless factors will be responsible for pushing it up or dragging it down. Right now, the price of silver is actually good right now so, you should sell silver bullion whilst the price is good because when all things are said and done, things are uncertain right now and anything can happen.

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