(Kitco News) – After nearly two years of trading in a relatively narrow range, even as gold prices saw a strong rally, silver joined the party in the first quarter of 2024, ultimately outpacing gold on the year, and industry experts and retail traders see another strong year ahead for the gray metal.
Spot silver kicked off the year, trading at $23.639 per ounce, which was near the lower edge of its range in 2023.
March is when silver prices begin to make their move, as they followed gold's nascent rally, with spot silver rising from $22.440 on February 27 to $25.604 by March 19. After a brief pullback below $25 per ounce, silver once again shot higher at the beginning of April, hitting a high of $28.841 on April 14th before closing the month in the $26.600 range.
May saw the strongest single move in silver prices to date, with spot silver rocketing from $26.554 per ounce on May 2 all the way to $32 on May 20, a level it achieved again on May 27. This was followed by a period of consolidation in its new higher range, as silver prices traded between $28.750 and $31 per ounce through mid-July.
The last week of July saw silver prices break decisively below $28 once again, and after one final attempt to reclaim $29 was rejected, silver kicked off the month of August trading at multi-month lows around $26.580 per ounce.
What followed was another strong and steady rally higher, as silver prices never dropped below $27 per ounce for the rest of the year. By late August, spot silver was once again testing resistance at $30 per ounce, and after an early September pullback saw the gray metal dip below $28, this was followed by a strong rally that saw spot silver break decisively above $30 per ounce on September 12.
The $30 level was now acting as support for the gray metal, which quickly moved up to $32 by September 23, and after retesting support just above $30 per ounce on October 8, spot silver set what proved to be the annual high of $35 per ounce on October 21. After a brief dip down to the $33.600 range, the spot price once again rose back above $34 per ounce, topping out at $34.442 on October 28th, the last time silver would see trade above $34.
The gray metal then began a pullback ahead of the U.S. Presidential election, and as Americans went to the polls, spot silver was trading at the $32/oz level. When Trump's victory became apparent, silver followed gold sharply lower, dropping to $31 per ounce on November 5th, and sliding all the way to $30 per ounce by November 14th.
From there, silver prices traded in a relatively narrow range between $30 and $32 per ounce, up until the final Federal Reserve meeting of the year on December 18, which drove both gold and silver prices sharply lower, and saw spot silver finally bounce off support at $29 per ounce.
The Kitco News Annual Silver Survey showed strong belief in the gray metal’s bullish potential on the part of retail traders, while the big banks and industry experts mostly expect continued strength from silver prices.
Ole Hansen, head of commodity strategy at Saxo Bank, said that on balance, the gray metal still has the potential to outperform gold in 2025.
“This year’s silver rally hasn’t shown any fundamental differences compared to past surges,” he said. “Silver continues to mirror gold’s movements, but with more intensity. Often referred to as gold ‘on steroids,’ silver tends to rise and fall more dramatically than its steadier counterpart.”
Hansen pointed out that silver only reached a 12-year high in 2024, while gold set multiple all-time highs. “This dual role — balancing both investment and industrial demand — could enable silver to outperform gold in the coming year. At Saxo, we predict a potential decline in the gold-to-silver ratio, which currently hovers around 87, possibly moving toward 75, a level seen earlier in 2024.”
“If this occurs, and with gold reaching our forecast of $3,000 per ounce (a 13% increase), silver might reach $40 per ounce (a rise of over 25%),” Hansen concluded.
According to TD Securities’ Senior Commodity Strategist Daniel Ghali, gold buyers were looking exhausted at the end of November, signaling that a near-term price top for the yellow metal is likely in, and silver is now looking better-positioned for further gains.
“The set-up for flows in Silver is notably superior,” he said.
Commerzbank precious metals analyst Carsten Fritsch said he remains bullish on silver for 2025, as the metal looks to end the current year in lockstep with gold. He pointed out that the gold/silver ratio is trading around 85 points, roughly where it started the year, even as prices have risen 30% in 2024.
“In other words, silver is still cheap compared to gold,” Fritsch said.
Fritsch noted that the Federal Reserve’s easing cycle has supported investment demand for gold and has improved silver’s investment appeal this year, as evidenced by inflows into silver-backed exchange-traded funds (ETFs). However, he also pointed out that physical bullion demand is currently hovering at a four-year low.
Looking ahead, Fritsch noted that analysts expect another supply deficit in 2025, which will support the precious metal’s long-term price outlook.
“We expect the price to rise to USD 32 per troy ounce by the middle of next year and to USD 33 by the end of 2025,” he said. “As a result, silver would also gain some ground against gold, and the gold/silver ratio would fall to 80 by the end of 2025, taking into account our gold price forecast of USD 2,650 per troy ounce.”
This week, 176 retail investors participated in the Kitco News Silver Survey, with a near-majority of Main Street predicting the gray metal will challenge all-time highs in 2025.
84 retail traders, fully 48%, expect silver to trade above $40 per ounce next year, with $48 the all-time high set in March 2011. Another 20%, or 35 Main Street investors, predicted silver prices will trade between $35 and $40 in 2025, while only 10%, or 17 participants, expect silver to top out somewhere between $30 to $35. The remaining 40 retail traders, representing 23% of the total, think silver prices will drop back into the $22 to $30 per ounce range seen in 2023 and 2024.
Michael DiRienzo, president and CEO of the Silver Institute, said that the election of Donald Trump and the threat of tariffs has been a setback for silver in the near term, but the gray metal still has strong drivers to support price growth in 2025.
When asked where he sees silver prices in 2025, DiRienzo said the Silver Institute doesn’t like giving price projections, but he’s encouraged by some of the numbers suggested by analysts.
“If you get to $36, $37, $38 [per ounce] next year, you're looking at an average price probably about $32, $33, and the market really would appreciate that,” he said. “Those banks […] that are making these projections are doing it for a reason, and the reason is that silver continues to be a valuable resource, and its future is extraordinarily bright with the Green Revolution.”
Analysts and BMO are optimistic about silver in 2025, but they believe the gray metal faces more risks compared to gold.
BMO forecasts silver prices to average $29 an ounce next year, up 6% from its previous forecast, and noted that higher gold prices remain the biggest bullish factor for silver in the new year.
Although they expect silver to underperform gold next year, BMO said the precious metal remains well-supported in the long term as the green energy transition and the electrification of the global economy drive industrial demand higher.
Analysts at Heraeus Precious Metals expect that most of the gray metal’s recent strengths will carry over into the new year, and the price of silver is projected to outperform gold in 2025.
The analysts pointed out that the elevated gold:silver ratio suggests that silver is still historically undervalued relative to gold despite this year’s sector-leading rally. “Silver tends to outperform gold in the later stages of bull markets, and a reversion to the 27-year mean ratio of 67 as a result of a rally in silver implies a price of $40/oz,” they said.
Heraeus forecasts the spot price of silver to trade between $28 and $40 per ounce in 2025.
Independent analyst Damian Nowiszewski said the big question facing precious metals traders going into 2025 is whether silver’s long-term uptrend can survive short-term price pressures.
“Looking beyond the immediate volatility, silver remains in a long-term uptrend that has been in place since April 2020,” Nowiszewski noted. “Despite occasional pullbacks, the overall trend has been higher, with recent price action reflecting a battle around key resistance levels.”
Silver has rallied alongside gold on Friday, rising from $28.831 per ounce just before 8:30 a.m. EST to a high of $29.681 by 2:30 p.m. EST.
Spot silver last traded at $29.462 per ounce for a gain of 1.50% on the day.
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