Gold silver prices: Gold-to-silver ratio hits new low today: Why silver is outperforming gold despite biggest drop in years
Silver Prices Dropped Sharply Today After Passing $100 Per Ounce: Silver Outperformed Gold Despite Recent Sell-Off
The metal suffered its biggest drop in years on Friday, shortly after breaking the $100-per-ounce mark earlier this year. Despite this pullback, silver’s value more than tripled last year, far outpacing gold, which gained nearly 90% in value during the same period, according to a Yahoo Finance report.
Gold/Silver Ratio Reached One of Its Lowest Levels in Recent Years
This imbalance has pushed the gold-silver ratio, a key metric that measures how many ounces of silver are needed to equalize the price of one ounce of gold, to a new low. According to market experts, this ratio can provide important clues as to whether silver is overextended or still undervalued, according to a Yahoo Finance report.
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Why is the Gold/Silver Ratio Important for Investors?
“The gold-to-silver ratio is 48 compared to the long-term average of 65 and the low 30,” said Chris Mancini, associate portfolio manager at the Gabelli Gold Fund. “If the ratio drops to the low 30, that would mean silver would be $170 per ounce, given $5,100 per gold, Yahoo Finance reported.”
What Causes the Change in the Gold/Silver Ratio?
Analysts say the change in the rate reflects broader macroeconomic forces rather than just silver. Silver’s rise last year was driven by a shift away from dollar-denominated assets, rising geopolitical tensions and growing economic uncertainty.
“It’s not about silver, it’s about broader economic and political conditions,” Jeffrey Christian, managing partner of CPM Group and a longtime precious metals market expert, said, as quoted by Yahoo Finance. It noted economists’ growing concerns about weakening labor markets, persistent inflation and the effects of tariffs and trade restrictions on both the US and global economy.Also read: US dollar jumps to biggest single-day gain since July after silver price and gold collapse today – Why Kevin Warsh’s Fed candidacy is triggering global market chaos
Why Do Investors Turn to Gold and Silver During Market Uncertainty?
In times of uncertainty, investors often turn to precious metals such as gold and silver to protect against inflation and market fluctuations. These assets are often seen as safe havens because they tend to behave differently than stocks and bonds.
Industrial Demand and the Global Silver Supply Shortage
Silver’s role goes beyond soliciting investment. Unlike gold, it has widespread industrial use and is a key component of technologies such as solar panels, smartphones, televisions, semiconductors and artificial intelligence data centers. Rising industrial demand has contributed to global supply shortages, increasing pressure on prices and affecting the gold/silver ratio.
Silver Price Forecast: Analysts Predict Silver Prices to Rise Despite Volatility
Despite the metal’s recent volatility, some analysts expect silver prices to rise further this year. Peter Reagan, financial market strategist at precious metals IRA firm Birch Gold Group, said silver prices will rise “due to increased interest from investors due to physical supply constraints, strong demand for industrial purposes, and economic uncertainty,” as quoted by Yahoo Finance.
But he cautioned that whether now is the right time to invest depends on a person’s financial goals and risk tolerance.
Is Silver Still Undervalued Compared to Gold?
Stating that “silver has historically been more volatile than gold,” Reagan said, “Gold is perceived to be stable, and silver has the potential to offer higher returns with higher risk due to industrial demand,” as quoted by Yahoo Finance.
FAQ
What is the gold-silver ratio?
It measures how many ounces of silver the price of one ounce of gold equals.
Why did silver outperform gold last year?
Silver prices tripled due to economic uncertainty and strong demand.
