30-04-2025 15:34
Silver to outshine gold?
Gold and silver remain cornerstones of the global financial system, closely tracked by analysts and investors alike. The recent surge in gold prices has reaffirmed its role as a traditional safe haven in times of turmoil. However, history suggests that silver, the second most important precious metal, may not only follow in gold’s footsteps but even outperform it.
Often overshadowed by its more popular counterpart, silver tends to rally after gold stabilizes, particularly in periods of market recovery. Analysts note that over the past year, gold prices have risen by nearly 41%, delivering a 113% return over the current decade compared to 78% for the S&P 500 index.
Last week, gold briefly reached an all-time high before pulling back slightly as President Donald Trump softened his trade rhetoric and the Federal Reserve adjusted its stance. Despite this, investors continue to favor gold amid ongoing geopolitical and macroeconomic uncertainty.
However, silver’s moment may be just ahead. Historically, silver rallies have followed gold surges, owing to silver’s hybrid nature. It shares gold’s role as a crisis hedge and inflation protector, while also having significant industrial demand, particularly in electronics and solar energy. As a result, silver is more sensitive to the economic cycle, lagging behind gold at the onset of a downturn but often outperforming it in a recovery.
The gold-to-silver ratio, a key metric for many investors, stood at 98 last week, well above the 30-year average of 68, signaling that silver remains undervalued relative to gold.
A similar pattern occurred after the 2008 financial crisis. In just five months, the gold-to-silver ratio jumped from 53 to 80. During 2009, silver rose by 81%, while gold gained only 44%. Once again, silver outpaced gold, reinforcing the belief that it often surges after periods of extreme gold dominance.
Only a full-scale global economic collapse could break this pattern, experts warn. They also note that silver has proven to be resilient during past recessions, and its outlook is supported by expected fiscal stimulus and renewed industrial demand.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Published 30 April 2025
© InstaFintech Group
© InstaFintech Group
