The metal sits 30% below its all-time high, while the gold-silver ratio hovers near historic extremes.
While gold has surged from one record high to the next in recent months, its lesser-followed cousin, silver, has remained largely overlooked by the market. Amid mounting geopolitical tensions and trade uncertainties that have shaken global equity markets and disrupted supply chains, both institutional and private investors have increasingly turned to gold as a safe-haven asset. Yet analysts are now pointing to growing signs that silver may be poised for a comeback. According to the Silver Institute, silver has entered its fifth consecutive year of market deficit, as global demand continues to outpace supply. This is primarily driven by the metal’s dual role as both an investment vehicle and an industrial material. Over half of the global silver production is used in industries such as electronics, medicine, and solar energy, with the latter becoming increasingly important in recent years. The Silver Institute forecasted a 20% increase in demand from the photovoltaics sector in 2024 compared to the previous year, as reported in its World Silver Survey 2024.
Gold-Silver-Ratio Points to Upward Potential
Besides the supply shortage, the relationship between silver and gold also supports the case. Since the gold standard was abandoned in the 1970s, the gold-silver ratio, or the number of ounces of silver required to buy one ounce of gold, has averaged around 65. Today, that ratio has spiked to nearly 100, a level not seen since the COVID-19 pandemic. According to Philipp Götzl-Mamba, precious metals expert at raw materials trader Tradium, the extreme ratio signals opportunities: “Given how significantly silver is undervalued compared to gold, we see clear bullish signals for the metal,” he said in an interview with Handelsblatt. Historically, such extremes have often preceded sharp rebounds in the silver price, he said further.
Estimated silver demand per sector according to the Silver Institute.
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