Amid escalating Middle East tensions, which pushed gold prices above $5,200 per ounce and silver above $88 per ounce on Tuesday, February 24, geopolitical uncertainties continue to inject unprecedented volatility into the precious metals market.
However, a fund manager cautions investors to ignore short-term noise and focus instead on the broader fundamental factors driving long-term upward trends.
Jen Bawden, Founder and CEO of Bawden Capital, noted in her recent commentary that she views U.S. President Trump's threats toward Iran as part of a broader negotiation strategy and believes escalation is unlikely. Despite rising tensions, U.S. and Iranian negotiators are scheduled to meet in Geneva on Thursday to seek solutions that avoid military conflict.
Bawden stated, "If the two sides shake hands in Geneva or achieve a breakthrough in the Middle East, the 'safe-haven trade' could collapse rapidly. But the underlying reality is this: once war fears fade and political risk premiums drop, pushing gold and silver lower, the market will face a sobering truth. Even in a peaceful world, there is not enough silver to power AI data centers, global solar energy expansion, and next-generation defense industries."
She anticipates that a post-Iran event correction could drive silver prices down toward $50 per ounce.
"When headlines hit, I don’t get caught up in noise or panic. I’m waiting for the 'century sale,' because I know who is waiting on the other side of the world," Bawden added.
She highlighted several fundamental factors that continue to support higher prices. First, physical shortages remain a strong structural driver, as global silver consumption has exceeded mine production for six consecutive years. At the same time, the U.S. debt-to-GDP ratio continues to soar, with neither political party showing willingness to implement meaningful austerity—making inflation, effectively a hidden tax, the most likely path forward.
Bawden also expects rapid expansion in AI infrastructure and high-power data centers to boost silver demand, as both require substantial silver for unparalleled conductivity, along with uranium to power the energy-intensive systems underpinning the digital economy.
Finally, mounting stress in the financial system—particularly from commercial real estate loan resets and pressure on regional banks' market value—increases the risk of a credit crunch. Such conditions could drive investors back to hard assets without counterparty risk.
Meanwhile, Bawden said she expects a 40% correction in junior silver exploration companies. During this adjustment, she plans to acquire projects in North America.
She also anticipates demand from Asia to pick up after investors return from the Lunar New Year holiday.
However, Bawden warned that if broader conflict erupts in the Middle East, gold could quickly rebound to $5,500 per ounce, with silver returning to last month’s high near $120 per ounce. In such a scenario, she would look to take profits.
"If the U.S. goes to war with Iran and silver tests its highs, I will sell my silver equities when prices reach $100 to $125. Given the unprecedented potential for deflation amid de-dollarization trends, I would also sell my uranium portfolio," she explained.
As of 11:17 Beijing time on February 24, spot silver was trading at $87.43 per ounce.
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