Silver prices fall sharply today after crossing $100 an ounce: Silver outperforms gold despite recent selloff
The metal suffered its biggest drop in years on Friday, shortly after breaking above $100 an ounce earlier this year. Despite this decline, silver has more than tripled in value over the past year, far outpacing gold, which has gained roughly 90% over the same period, according to a Yahoo Finance report.
The ratio of gold to silver reached one of the lowest levels in recent years
The imbalance pushed the gold-to-silver ratio, a key metric that measures how many ounces of silver it takes to equal the price of one ounce of gold, to a new low. According to market experts, the ratio can offer important clues about whether silver is overvalued or still undervalued, as reported by Yahoo Finance.
Also Read: New Epstein Files Released by US Justice Department Today: Why Trump, Robin Leach and Ghislaine Maxwell Are Named in DOJ Documents
Why the gold to silver ratio is important to investors
Chris Mancini, associate portfolio manager of the Gabelli Gold Fund, said: “The gold-silver ratio is 48 compared to a long-term average of around 65 and a low of 30,” adding: “If the ratio falls to the low of 30, that would mean silver would be $170 an ounce against $5,100 an ounce of gold,” Yahoo Finance quotes.
What drives the shift in the gold to silver ratio
Analysts say the shift in the ratio reflects broader macroeconomic forces rather than silver itself. Silver’s rise over the past year has been driven by a shift away from dollar assets, rising geopolitical tensions and growing economic uncertainty.
Jeffrey Christian, managing partner of CPM Group and a longtime bullion market expert, explained that “it’s not about silver, it’s about broader economic and political conditions,” as quoted by Yahoo Finance. He pointed to growing concerns among economists about weakening labor markets, persistent inflation and the impact of tariffs and trade restrictions in both the US and the global economy. Also Read: US dollar jumps to biggest one-day gain since July after silver, gold prices tumble today – Why Kevin Warsh Fed nomination sparks global market chaos
Why investors turn to gold and silver during market uncertainty
During periods of uncertainty, investors often turn to precious metals such as gold and silver as a hedge against inflation and market volatility. These assets are often considered safe havens because they tend to behave differently than stocks and bonds.
Industrial demand and global silver supply shortage
The role of silver goes beyond investment demand. Unlike gold, it has broad industrial uses and is a key component in technologies such as solar panels, smartphones, televisions, semiconductors and AI data centers. This rising industrial demand has contributed to a global supply shortage, adding pressure on prices and affecting the gold-to-silver ratio.
Silver Price Prediction: Analysts predict higher silver prices despite volatility
Despite the metal’s recent volatility, some analysts expect silver prices to rise further this year. Peter Reagan, financial market strategist at IRA precious metals firm Birch Gold Group, said silver prices will rise “due to physical supply constraints, strong industrial demand and growing investor interest due to economic uncertainty,” as quoted by Yahoo Finance.
However, he cautioned that whether now is the right time to invest depends on an individual’s financial goals and risk tolerance.
Silver is still undervalued compared to gold
Reagan pointed out that “silver has historically been more volatile than gold,” adding, “Gold is seen as stable and silver has the potential to offer higher returns, but with higher risk due to industrial demand,” Yahoo Finance quotes.
Frequently asked questions
What is the ratio of gold to silver?
It measures how many ounces of silver equal the price of one ounce of gold.
Why has silver outperformed gold over the past year?
Silver prices have tripled, driven by economic uncertainty and strong demand.
Leave a Reply