The remarkable run in the two precious metals — gold and silver — has kept investors on the edge, eagerly awaiting the next market shift. Gold is up by 40% while silver has gained 20% in the last one-year. In the international market, silver trades at $33 while in India, the silver rate today is Rs 96,520 for 1 kg.
While the investors are waiting for the silver price to catch up with gold, the gold price started falling after reaching all-time highs. Is Trump to blame for gold prices?
Silver price not moving in tandem with gold is what is keeping investors perplexed. Over the last month, Gold is up by 5% while silver is down by 3%.
Silver Institute, in a recent report, highlights the reasons why silver may not have performed as good as gold – In our view, silver’s “failure to launch” is mainly due to the macro and geopolitical drivers of the past couple of years being primarily supportive of gold’s more widely accepted quasi-monetary properties.
Related to this, some of the key market participants of the past two years, for example ETF’s and sovereigns, are comfortable with the gold market’s depth and tradition as a diversifier, but less so with silver’s smaller size and industrial attributes.”
Also Read: Rich Dad Poor Dad author Robert Kiyosaki calls silver the ‘Biggest investment bargain’, expects price to double in 2025
Silver at the current price of around $33 is quite cheap compared to gold. How do we know this? It’s the gold: silver ratio that has a historical average of 70:1. Today, when gold trades at $3,290, gold:silver ratio is close to 100:1.
Either the price of silver must increase or the price of gold must decrease if the gold-to-silver ratio is to be believed. It is unlikely that the price of gold would drop much in 2025. That supports the idea that the price of silver should rise above its current levels.
With a global supply of 1.05 billion ounces and a demand of 1.20 billion ounces, silver is predicted to be in greater demand than supply in 2025. It is anticipated that this disparity would raise silver prices for the fifth year in a row.
Most of the factors influencing the price of silver are also influencing the price of gold. Another reason supporting silver is the robust industrial demand from cutting-edge sectors like solar energy and electric vehicles, which are likely to drive up silver prices in 2025.
Gold, currently at $3,290, is down about 6% from the highs but not out. Silver, meanwhile, is hovering around $33 and is holding steady at these levels. How the two perform for the rest of 2025 remains to be seen, especially amid the highly volatile and uncertain economic environment.