Gold:silver ratio hits 105, but analysts are not giving up on the ‘little’ sibling

(Kitco News) – Gold’s safe-haven appeal continues to dominate the marketplace, leaving silver further behind.

After holding support near $3,000 an ounce at the start of the month, gold has been on an unstoppable rally. Overnight, spot gold tested resistance at $3,500 an ounce. While prices have come down from their fresh record high, they are still extremely elevated, last trading at $3,460.70 an ounce, up 1% on the day. Gold prices are up nearly 32% so far this year.

Meanwhile, spot silver last traded at $32.70 an ounce, up 0.29% on the day. Silver has been struggling to hold gains above $33 an ounce in recent days.

While gold is making headlines for its parabolic rally, silver is also attracting some attention as it has not been able to capture the same bullish sentiment. The gold:silver ratio is trading at a fresh three-year high of 105.77 points. The historical average is around 60 points.

Silver isn’t even able to benefit from a weaker U.S. dollar; the U.S. dollar index is currently trading at 98.46 points, near a multi-year low.

Analysts note that gold is attracting all the attention because of safe-haven flows. Investors have been moving into gold as it has become the only reliable safe-haven asset. Analysts have said that President Donald Trump’s escalating global trade tensions have damaged the U.S. dollar’s reputation as the world’s reserve currency.

At the same time, growing stagflation fears as the trade war pushes inflation higher and slows economic growth are tarnishing silver’s industrial allure.

Mike McGlone, Senior Analyst at Bloomberg Market Intelligence, said that gold has been outperforming silver since before Trump won last year’s election. He added that the ratio’s push above 100 could be another recessionary signal and it has room to go higher in the current environment.

“Typically, it takes the depths of an economic contraction and plenty of central-bank easing for the cross to reach an apex,” he said. “Peaks in the gold/silver cross often come in the midst of recessions and typically precede highs in the jobless rate. The cross at 100 on April 15 is historically elevated, but it’s the room for unemployment to revert toward 6% that we find disconcerting.”

McGlone also noted that rising market volatility supports a higher ratio.

“At about 13%, the 52-week average of the Cboe Volatility Index (VIX) minus the fed funds rate is less than half the 2021 apex around 30% that roughly coincided with the gold/silver nadir at about 65. When volatility recovers from such elongated depressed levels – and rates fall – the gold/silver cross typically rises,” he said.

While silver is struggling to keep up with gold, some analysts are not ready to give up on the precious metal just yet. Ole Hansen, Head of Commodity Strategy at Saxo Bank, said that he still sees potential for silver to push to $40 an ounce this year.

Although recession fears are impacting silver’s industrial demand, which accounts for roughly half of global consumption, Hansen said that the ongoing green energy transition remains relatively recession-proof.

“Silver’s industrial use towards the energy transition is unlikely to suffer a major setback despite a recession. Silver is projected to experience another supply deficit in 2025, marking the fifth consecutive year of such shortfalls,” he said. “Gold’s rally is creating a natural interest to buy its ‘cheaper’ sibling.”

Last week, the Silver Institute published its 2025 Silver Survey, which shows the precious metal is expected to see a deficit of 117 million ounces as demand falls slightly to 1.148 billion ounces and total supply increases by 1.5% as mine output rises.

In an interview with Kitco News, Philip Newman, Managing Director at Metals Focus, which conducted the research for the Silver Institute, said that he suspects silver’s industrial demand to be relatively recession-proof.

He also noted that while the ratio has room to move higher, these elevated levels have proved to be unsustainable.

“Some investors are thinking: ‘This can’t carry on. This ratio has to come down.’ Even if the ratio was 80 or 75, silver would be getting pretty close to $40, and that isn’t that dramatic,” he said.