It Could Be Time for Silver to Shine Next to Gold

(September 24, 2024 - Ben Hernandez)

Gold prices are up over 27% so far this year. But silver prices have outpaced its precious metal counterpart, with more than a 30% gain in the same time frame. With so much attention thrown in the direction of the yellow metal, it could time for silver to shine.

One metric that’s indicating a push for silver is the gold-silver ratio, which is derived from dividing the price of the yellow metal by that of silver. The current ratio value could portend to future strength for silver ahead.

“First, silver has slightly outperformed gold this year, but gold prices are still elevated with respect to silver on a historical basis when looking at the so-called gold-silver ratio,” a Yahoo Finance article noted. “When the multiple of gold to silver reaches 80, many investors will look for buying opportunities in silver, betting that the ratio will mean revert.”

Catalysts for Silver’s Growing Attractiveness

Demand for the yellow metal has been driven by central bank buying and other factors earlier in the year. But as market volatility has returned, so has its status as a safe haven asset. Silver can also serve as a precious metal. But its demand could also be due to the move toward reducing global emissions. Silver’s use in clean energy technology makes the metal an attractive option, especially given the growing need for electricity. Big tech’s reliance on electricity to power its AI will also help propel silver.

Combining Silver and Gold

It’s difficult to pass over exposure to the yellow metal given its strong momentum alongside silver. Investors can reap the benefits of gold as a store of value while also getting the duality of silver as a precious and industrial metal with a fund that combines exposure to both.