With the industrial metal finally making a big move to catch up to gold’s gains, silver surged Thursday to hit its highest price in over 13 years, bringing the gold-silver ratio down to its lowest level since the Trump administration’s “liberation day” tariff announcement.
According to Dow Jones Market Data, silver for July delivery (SI00) (SIN25) closed Thursday on Comex at $35.81 an ounce, the highest most-active contract finish since February 28, 2012. This year, it has gained almost 22% so far.
According to Maria Smirnova, senior portfolio manager and chief investment officer at Sprott Asset Management, “the breakout has been brewing for a while, as silver had attempted to break through the $35 level a couple of times in recent months, so this is highly significant,” she said in an email to MarketWatch on Thursday.
“If the technical move catalyzes physical investor-buying, it can take silver much higher very quickly,” she stated. “The silver market is thin, and it will not take much buying activity to send the price higher.”
The silver surge coincides with a session-long decline in gold prices. August gold (GC00) (GCQ25) ended the day at $3,375.10 an ounce, down $24.10, or 0.7%. Silver has not kept pace with the yellow metal’s approximately 28% year-to-date increase.
However, the gold-to-silver ratio has dropped to about 94. Adrian Ash, director of research at BullionVault, explained that the ratio provides a way to quantify the worth of gold in relation to its “industrially useful cousin” silver. Accordingly, 94 ounces of silver are needed to purchase one ounce of gold.
As gold reached its current all-time dollar high of $3,500 in late April, the ratio is down 10 ounces of silver from the post-COVID high of over 100, Ash added.
President Donald Trump’s “liberation day” tariff announcement on April 2 caused a “brief but severe slump in industrial commodities and global stock markets,” according to Ash, and the current ratio is the lowest figure since then. After Trump announced tariffs, silver prices fell more than 15% between April 2 and April 4. In contrast, gold saw a decline of about 4% throughout that time.
“Traders and analysts have scrambled to find a headline trigger for silver’s jump Thursday because gold is such a narrative asset,” Ash said. “But nothing stands out as spurring today’s price surge in London – not in the news, not in lease rates, and not in [exchange traded funds] or Comex data.”
Rhona O’Connell, head of market analysis at StoneX, stated in commentary on Thursday that there didn’t seem to be a particular catalyst for silver’s most recent upward advance.
However, it’s possible that “ratio trading” was sparked by the gold-silver ratio’s decline below the 100 mark. StoneX and Rhona O’Connell
“Ratio trading,” she suggested, might have been prompted by the gold-silver ratio’s decline below the 100 mark.
“The fact that silver is at the highest since 2012 is, of course, of interest, but silver is notoriously volatile and it is fully capable of dropping as sharply as it rises,” O’Connell stated. “This is not necessarily a false move, but it is now heavily overbought and should, as always when silver does this sort of thing, be treated with caution.”
Nevertheless, there had been indications that silver was ready for a breakthrough move higher.
Even though the gold-to-silver ratio remained stable at close to all-time highs, silver was lagging behind gold’s record run.
Some analysts believed there was a chance for a big increase in silver prices, partly due to a shortage in the world’s supply of the metal.
“The supply/demand deficits in silver have been a topic of discussion for some time,” stated Smirnova of Sprott. The Silver Institute predicted that in 2025, global demand for silver would surpass supply for the fifth consecutive year.
According to Smirnova, the deficits are expected to persist. “Silver has a very positive investment case right now.”
However, that does not necessarily imply that silver will rise to new record highs.
Ash of BullionVault told MarketWatch, “It’s hard to see the metal extending this jump anywhere close to the 2011 and 1980 high of $50” an ounce, given the challenges facing silver’s industrial demand.
nevertheless, “with no one in the market able to pinpoint as yet what’s driven the move to 13-year highs…silver has confirmed its reputation as the ‘Devil’s metal,’ leaping without warning and leaving the technical picture very bullish for further gains,” he stated.
