(Kitco News) - Gold has been the shining star in the commodity space, as prices have rallied roughly 33% so far this year, trading near recent record highs of $2,800 an ounce. However, analysts at the World Bank suggest that silver is the precious metal to watch in 2025.
The World Bank recently released its updated commodity market forecast. While gold is expected to continue outperforming the broader sector, the latest projections show analysts anticipate weaker demand next year through 2026.
“Demand from central banks and jewelry production, which together account for about two-thirds of global gold demand, is likely to ease over the forecast horizon due to record-high prices,” the analysts said in the report. “Gold prices are expected to increase by 21 percent in 2024 (y/y) and remain around 80 percent higher than their 2015-2019 average throughout the forecast period, edging down by just 1 percent in 2025 and 3 percent in 2026.”
However, the World Bank sees greater potential for silver as it expects growing demand and constrained supply to support prices.
“Silver demand is expected to grow steadily over the forecast horizon, fueled by its dual financial and industrial uses,” the analysts said. “With modest supply growth lagging behind strong demand tailwinds, silver prices are projected to rise by 7 percent in 2025 (y/y) and 3 percent in 2026, following an expected 20 percent increase in 2024.”
These predictions come as silver prices have only recently started to outperform gold. Silver prices are up more than 35% so far this year, with solid support above $32 an ounce. However, the gold/silver ratio remains relatively elevated, currently trading above 84 points.
Many analysts expect silver to continue outperforming gold through 2025, as it is seen as significantly undervalued compared to the yellow metal.
The World Bank is also optimistic about platinum despite this year’s price struggles. Although platinum’s automotive demand is expected to face challenges next year, the World Bank sees potential for price gains as the supply deficit grows.
“After an expected 4 percent increase in 2024 (y/y), platinum prices are forecasted to gain 5 percent in both 2025 and 2026, supported by tighter mine supply among major producers, particularly declining output capacity in South Africa,” the analysts said.
While gold might lag next year, the precious metals complex as a whole is considered a safe commodity bet. The World Bank anticipates relatively flat base metal prices next year and a decline in 2026.
“Base metal prices are projected to stabilize next year before declining in 2026, as steady supply growth is counterbalanced by secular demand growth, including tailwinds from the energy transition,” the analysts said.
The World Bank is most bearish on the energy sector, projecting oil prices to fall by 6% in 2025 and another 2% in 2026. Although geopolitical uncertainty may create some market volatility, analysts clearly see downside risk for oil.
“A prolonged intensification of the conflict in the Middle East poses pronounced upside risks to energy prices. Other upside risks include lower-than-expected North American oil output, increased competition for liquefied natural gas cargoes, and sustained, higher-than-anticipated coal and natural gas consumption in Asia,” the analysts said. “However, there are also substantial downside risks to energy prices, particularly an earlier-than-expected unwind of OPEC+ supply cuts, which could result in abundant oil supply, as well as weaker-than-expected economic growth, including in China.”
