Silver outperforms gold, but analysts expect shift
Silver prices have enjoyed a merry run in the last few weeks, which has seen the precious metal overtake gold in terms of gains.
However, analysts expect silver’s outperformance relative to gold is likely to end in the coming weeks.
“As the price of silver has significantly reduced its undervaluation relative to gold and the gold/silver ratio is now only slightly above its long-term average, silver’s outperformance relative to gold is likely to gradually come to an end,” Carsten Fritsch, commodity analyst at Commerzbank AG, said.
Silver prices reach unprecedented levels
Boosted by an increase in gold prices, silver surged past $40 per ounce earlier this week, marking its first time at that level in 14 years.
At the time of writing, the December silver contract on COMEX was at $41.530 per ounce, largely unchanged from the previous close. The current price level has not been seen since 2011.
The gold/silver ratio fell to its lowest point this year, reaching 85, as the price of silver outpaced that of gold.
Silver prices had been trailing gold for an extended period, leading to the gold/silver ratio exceeding 100 by April.
Concerns about a global recession were exacerbated by the reciprocal tariffs announced by US President Donald Trump. Nearly 60% of silver demand comes from industrial applications.
“The escalation of mutual tariffs between the US and China to prohibitively high levels in April was particularly detrimental,” Fritsch added.
The subsequent suspension of most of these tariffs helped prices to recover.
The US government recently extended the deadline for an agreement with China to mid-November, a three-month extension.
Investors were likely drawn to the silver market due to its significant undervaluation compared to gold, according to Fritsch.
The Silver Institute and Metals Focus both forecast that this market will experience its fifth consecutive year of undersupply.
Since the end of May, Bloomberg-tracked Silver ETFs have experienced inflows totaling almost 2,100 tons.
Silver gains US critical mineral status
In a significant development for the global minerals market, the US government has officially updated its list of critical minerals to include silver.
This decision underscores silver’s increasing importance across various industrial, technological, and strategic sectors.
“The United States Geological Survey (USGS) assessment reflects a significant advancement in how the US evaluates mineral criticality using advanced methodology based on economic importance, supply chain vulnerabilities, and projected demand growth,” analysts at Heraeus were quoted in a Kitco.com report.
With domestic output covering only around 30% of consumption, the US remains heavily dependent on imports from Mexico, Canada, and Peru, highlighting potential geographical risks as silver demand continues to rise.
Despite a decline in US policy support for renewables, particularly wind and solar, the US utility-scale solar industry is set to achieve record capacity growth in 2025, according to the analysts.
This surge is attributed to developers expediting projects before subsidy reductions are implemented.
The analysts further observed that solar is expected to constitute over 50% of all new utility-scale power capacity additions in 2025. However, to be eligible for the full federal solar tax credit, construction needs to commence by mid-2026.
While that is good news for silver demand from photovoltaics, given the changes in the regulations in China that could limit installations in the much larger market, overall global solar demand could be flat or lower this year than the 198 moz reached in 2024.
Palladium and platinum
At the start of the week, both platinum and palladium prices experienced a notable increase.
“The trigger here was likely also the rise in gold prices,” Fritsch said.
Platinum is currently trading at just over $1,410 per ounce, still below its July 11-year high. There is no specific news concerning platinum and palladium.
The gold/platinum ratio has remained consistent at approximately 2.5, indicating that the price of platinum has generally mirrored that of gold.
Palladium is currently priced at $1,162 per ounce, significantly below its peak values. Since late July, the gold-to-palladium price ratio has climbed above 3.
Fritsch noted:
Palladium has thus underperformed gold and platinum in recent weeks
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Silver outperforms gold, but analysts expect shift
Silver prices have enjoyed a merry run in the last few weeks, which has seen the precious metal overtake gold in terms of gains.
However, analysts expect silver’s outperformance relative to gold is likely to end in the coming weeks.
“As the price of silver has significantly reduced its undervaluation relative to gold and the gold/silver ratio is now only slightly above its long-term average, silver’s outperformance relative to gold is likely to gradually come to an end,” Carsten Fritsch, commodity analyst at Commerzbank AG, said.
Silver prices reach unprecedented levels
Boosted by an increase in gold prices, silver surged past $40 per ounce earlier this week, marking its first time at that level in 14 years.
At the time of writing, the December silver contract on COMEX was at $41.530 per ounce, largely unchanged from the previous close. The current price level has not been seen since 2011.
The gold/silver ratio fell to its lowest point this year, reaching 85, as the price of silver outpaced that of gold.
Silver prices had been trailing gold for an extended period, leading to the gold/silver ratio exceeding 100 by April.
Concerns about a global recession were exacerbated by the reciprocal tariffs announced by US President Donald Trump. Nearly 60% of silver demand comes from industrial applications.
“The escalation of mutual tariffs between the US and China to prohibitively high levels in April was particularly detrimental,” Fritsch added.
The subsequent suspension of most of these tariffs helped prices to recover.
The US government recently extended the deadline for an agreement with China to mid-November, a three-month extension.
Investors were likely drawn to the silver market due to its significant undervaluation compared to gold, according to Fritsch.
The Silver Institute and Metals Focus both forecast that this market will experience its fifth consecutive year of undersupply.
Since the end of May, Bloomberg-tracked Silver ETFs have experienced inflows totaling almost 2,100 tons.
Silver gains US critical mineral status
In a significant development for the global minerals market, the US government has officially updated its list of critical minerals to include silver.
This decision underscores silver’s increasing importance across various industrial, technological, and strategic sectors.
“The United States Geological Survey (USGS) assessment reflects a significant advancement in how the US evaluates mineral criticality using advanced methodology based on economic importance, supply chain vulnerabilities, and projected demand growth,” analysts at Heraeus were quoted in a Kitco.com report.
With domestic output covering only around 30% of consumption, the US remains heavily dependent on imports from Mexico, Canada, and Peru, highlighting potential geographical risks as silver demand continues to rise.
Despite a decline in US policy support for renewables, particularly wind and solar, the US utility-scale solar industry is set to achieve record capacity growth in 2025, according to the analysts.
This surge is attributed to developers expediting projects before subsidy reductions are implemented.
The analysts further observed that solar is expected to constitute over 50% of all new utility-scale power capacity additions in 2025. However, to be eligible for the full federal solar tax credit, construction needs to commence by mid-2026.
While that is good news for silver demand from photovoltaics, given the changes in the regulations in China that could limit installations in the much larger market, overall global solar demand could be flat or lower this year than the 198 moz reached in 2024.
Palladium and platinum
At the start of the week, both platinum and palladium prices experienced a notable increase.
“The trigger here was likely also the rise in gold prices,” Fritsch said.
Platinum is currently trading at just over $1,410 per ounce, still below its July 11-year high. There is no specific news concerning platinum and palladium.
The gold/platinum ratio has remained consistent at approximately 2.5, indicating that the price of platinum has generally mirrored that of gold.
Palladium is currently priced at $1,162 per ounce, significantly below its peak values. Since late July, the gold-to-palladium price ratio has climbed above 3.
Fritsch noted:
Palladium has thus underperformed gold and platinum in recent weeks
The post Silver outperforms gold, but analysts expect shift appeared first on Invezz
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