The oil market has just sent a historic signal. Within only 5 trading days last week, the US oil price rose by around 34.5%, the largest weekly increase since records began in 1982. Such moves are not ordinary market fluctuations but warning signals with far-reaching consequences for inflation, economic growth and capital markets.
Investors are therefore watching closely to see what such a surge could mean for inflation, growth and financial markets. Many expect an immediate and strong reaction in gold and silver during moments like this. History, however, shows a different pattern: Precious metals often react to energy shocks with a delay. What matters is not the initial price spike, but whether the shock turns into a lasting burden for the broader economic system. To understand why this happens, it is worth taking a closer look at the mechanisms behind the current situation.
The Real Trigger: The Shipping & Insurance Market
The current oil price shock is not only geopolitical in nature, but also the result of disrupted logistical and insurance-related processes. At the center of it all is the shipping and insurance market. The Strait of Hormuz is one of the world’s most important energy transport routes. Around 20% of global oil trade passes through this narrow waterway.
Yet even if a route remains geographically open, it can still be effectively blocked in economic terms. Without calculable risks, sufficient insurance coverage and reliable transport chains, a sea route may remain open on the map, but in practice it becomes only partially usable. When insurers withdraw coverage, tankers can hardly operate in the region anymore.
That is exactly what now seems to be taking shape. Uncertainty around insurability, security and transport costs has led many ships to avoid the region. The market reacts to such risks immediately. Energy prices rise within hours. The economic consequences, however, unfold only gradually. It is precisely this time lag that explains why oil often reacts immediately, while gold and silver tend to respond later.
High Energy Prices Hit The Economy Like A Tax
Oil is not just another commodity but a central cost factor for virtually every economy. When energy prices rise, transportation, industrial production, food, logistics and consumer goods all become more expensive.
Rising energy prices therefore act like an additional tax on the global economy. Companies see their costs increase while consumers simultaneously lose purchasing power. Growth slows while inflation can rise.
This creates a difficult environment for central banks: On the one hand, an energy shock increases inflationary pressure, on the other hand it weighs on economic growth.
Situations like this often place monetary systems in a dilemma. Central banks cannot simply solve a supply-driven energy shock with interest rate policy.
Liquidity Shocks Hit All Markets At First
In acute stress phases, financial markets often react differently than many investors expect. When equity markets fall or credit markets come under pressure, investors often sell everything that can be liquidated, including gold and silver. The reason is simple: Market participants need cash to offset losses or meet margin calls.
That is why precious metals can also come under short-term pressure in the first phase of a crisis. This is not a contradiction of their protective function, but often part of the typical crisis pattern. Yet it is often exactly after that point that the second phase begins. Once the market realizes that the problems are structural, whether through inflation, economic uncertainty or systemic risks, perception changes fundamentally and real assets move back into focus. Historically, this is often when the strongest move in precious metals begins. At that point, gold and silver are no longer seen merely as tradable commodities, but once again as monetary assets.
A Look At History
This pattern is not a theoretical model. It can be clearly observed in several major crises over the past decades: Precious metals often react to energy shocks with a delay.
- Oil Crisis 1973: After the Yom Kippur War, several Arab states imposed an oil embargo on Western countries. Within a few months, the oil price quadrupled. Gold initially reacted relatively modestly. The real repricing only began once it became clear that higher energy prices were not temporary but would become deeply embedded in the global price level. In the year following the oil crisis, the gold price rose by more than 70%. The strongest move therefore began only once the market recognized the structural economic consequences of the shock.
- Second Oil Shock 1979: A similar pattern appeared during the Iranian Revolution. The loss of Iranian oil production once again pushed energy prices sharply higher and drove rising inflation. Between 1978 and early 1980, the gold price multiplied. Here too, the key factor was the combination of inflation, geopolitical uncertainty and declining trust in paper currencies. What began as a commodity shock increasingly turned into a monetary event.
- Gulf War 1990: A different picture emerged during the Gulf War in 1990. When Iraq invaded Kuwait, oil prices rose sharply. However, the conflict lasted only a few weeks. Once the situation stabilized relatively quickly, oil prices fell again. Gold also lost the momentum for a larger upward move. The decisive difference was the duration of the shock.
- Financial Crisis 2008: In the summer of 2008, the oil price reached around 147 USD per barrel for the first time. Just a few months later, Lehman Brothers collapsed, triggering the global financial crisis. In the first phase of this crisis, gold also fell briefly because investors worldwide needed liquidity. What followed, however, was a massive upward move. Between 2008 and 2011, the gold price rose from around 700 USD to more than 1,900 USD per ounce. Once again, the same pattern appeared: First a liquidity shock, then a monetary repricing. This phase is often difficult for investors to understand because safe havens can be sold off in the short term before ultimately showing their real strength.
Silver: The Underestimated Precious Metal
While gold has traditionally been seen as the monetary anchor, silver is often underestimated. Yet silver has a special characteristic: It is both a monetary store of value and an industrial metal. Silver is used in solar energy, electronics, electric mobility and modern energy technologies, among other areas.
This dual role means that silver often rises more strongly than gold during precious metals cycles. Gold often reacts first to monetary uncertainty, while silver can later benefit not only from industrial demand but also from its historically greater upside potential. Many investors therefore view silver as a kind of leverage play on the precious metals market. Especially when a short-term energy shock turns into a broader inflation and confidence shock, silver can move into focus disproportionately.
Another Risk Factor: Stress In The Credit Market
Alongside energy prices and geopolitical tensions, market participants are also watching developments within the financial system itself. Recently, early signs of stress have appeared in parts of the private credit market, a segment that has grown rapidly in recent years.
Private credit is often based on less liquid loans to companies. When investors ask for their capital back, funds cannot always sell these positions quickly. Such tensions do not automatically have to trigger a financial crisis. They do, however, make visible how quickly supposedly stable market segments can come under liquidity pressure. Historically, phases like this have often led to stronger demand for real assets.
Why Physical Ownership Matters
In times of rising uncertainty, one fundamental question moves back into focus: What is an asset really worth, and who actually owns it?
Paper products such as certificates or ETFs merely track the price of precious metals. Physical ownership, by contrast, means direct possession of a real asset with a monetary history stretching back thousands of years.
Storage is also crucial. Elementum stores precious metals in high-security facilities in the St. Gotthard Massif in Switzerland, for example. The metals remain fully owned by the clients, outside the financial system and are subject to independent audits. Especially in periods of growing uncertainty, this difference between a mere claim and actual ownership becomes significantly more important for many investors.
Bottom Line
History shows that energy shocks do not automatically lead to rising precious metals prices. The decisive question is this: Is the shock temporary or structural?
If energy prices normalize quickly, the reaction in precious metals usually remains limited. In that case, the shock remains a temporary event. But if rising energy prices begin to create lasting inflation, increase economic uncertainty and expose systemic risks, a second phase often begins in which gold and silver start to play a stronger role as monetary real assets. At that point, a price shock turns into a regime shift in how markets perceive risk and value.
The current oil price shock could therefore be more than just a short-term market move. It could mark the beginning of a phase in which real assets are repriced and deeper economic changes become visible.
And it is exactly in phases like these that real assets tend to move back into sharper focus for investors. Gold remains the classic monetary anchor. Silver may once again prove to be the more dynamic precious metal.
How can you buy precious metals cheaply and store them safely?
Elementum Deutschland GmbH, based in Sindelfingen (Germany), specializes in trading physical precious metals. Customers who purchase precious metals from Elementum Deutschland (or one of the other national Elementum companies in five European countries) can store them in the renowned high-security vaulting facilities in the St. Gotthard Massif in Switzerland at Elementum International AG.
Of course, you also have the option of purchasing gold and silver directly and having it delivered to your desired address. However, storing silver in the so-called open duty-free warehouse (“offenes Zollfreilager”) at St. Gotthard offers decisive tax advantages:
- The 19% value added tax customary in Germany is completely waived on purchases and sales – a considerable price advantage that effectively secures you 19% more silver for your money.
- If you store your silver in this high-security vault, you can sell it back to Elementum Deutschland GmbH at any time – without any bureaucratic hassle and also without VAT, as the trade takes place within the duty-free warehouse. You will receive the funds via bank wire.
- VAT is only payable when you physically remove the stored silver – either by picking it up in person (after prior notification) or by having it shipped to your address.
More silver, more return
Thanks to duty-free storage, you receive 19% more physical silver when you buy. This additional amount also participates in the performance of the silver price if it rises – a leverage effect that significantly improves your return opportunities.
Secure your storage space now – free of charge and without obligation
Register now for a storage space in the St. Gotthard high-security vaulting facility and receive free access to:
- our General Terms and Conditions (GTC)
- current fee tables
- annual audit reports from the auditing company BDO AG
- transparent proof of use of funds
- family discount information
- the popular children’s program “Schatz4Kids” (“Treasure4Kids”)
- as well as numerous other documents and information on storage, purchase, and resale, as well as the ratio “switching” strategy.
Register now: https://silberbar.elementum.de/
Tip for discounted entry: Enter the promotional code “50” (“Aktionscode“) and the “Vermittler” number 1000166 when registering to receive a 50% discount on the storage space setup fee.
Important: Registration is non-binding and does not commit you to anything – but it is your first step towards an independent and crisis-proof precious metal investment.
Elementum is a second-generation, owner-managed family business. Trust, consistency, and long-term thinking are at the heart of our philosophy. The Board of Directors of Elementum International AG is composed of internationally renowned experts in the money and precious metals markets, including economists, analysts, university professors, and precious metals specialists. This in-depth expertise forms the backbone of our actions – for your security, your assets, and your future.
About the Author
Stephan Bogner
CEO of Elementum International AG
Stephan Bogner, who holds a degree in business administration, studied economics at ISM Dortmund (Germany) and wrote the university’s first thesis on precious metals as a hedge against inflation. After studying in the UK and Australia and gaining professional experience in Dubai, he took over as CEO of Elementum International AG in Switzerland in 2012. His expertise in precious metals has had a significant impact on the company’s development.
Contact
Rockstone News & Research
Stephan Bogner (Dipl. Kfm., FH)
Müligässli 1, 8598 Bottighofen
Switzerland
Phone: +41-71-5896911
Email: info@rockstone-news.com
Disclaimer: This article reflects the personal opinion of the author. Elementum assumes no responsibility for the accuracy of the content and accepts no liability for its use. This article may contain links to external third-party websites. Elementum is not responsible for the content of these external sites and expressly distances itself from all information provided there. At the time the links were created, no unlawful content was identifiable. This article does not constitute a recommendation to buy or sell. Elementum International AG is a Swiss company that specializes exclusively in the storage of physical precious metals in a high-security vault facility located in the St. Gotthard mountain massif in Central Switzerland. The Board of Directors and Executive Management of Elementum International AG have been selected solely based on their professional expertise and long-standing experience in precious metals markets. As these individuals may also be professionally active outside their roles at Elementum International AG, the company has no influence over their external activities and respects their right to freedom of expression. Therefore, the views expressed by persons working with or for Elementum do not necessarily reflect the opinion of Elementum International AG. Investments in precious metals are subject to risks, including those specific to the structure of this market. Please read our full risk disclosures and consult a licensed financial advisor before making any investment decisions. Neither the author, Elementum International AG, nor Elementum Deutschland GmbH assume any liability for actions taken based on the information provided. Past performance is not indicative of future results. The cover picture has been obtained and licenced from 123rf.com.
