(Kitco News) - Gold prices are inching back closer to $2,700 an ounce amid a growing shift in monetary strategies, while silver's industrial demand is surging due to its use in green technologies and high-efficiency electronics, Randy Smallwood, CEO of Wheaton Precious Metals, tells Kitco News.
In terms of the gold price movements, the West is yet ot get involved, according to Smallwood. “The West doesn’t control gold anymore,” Smallwood said. “This bull run started in the East—Middle East, Southeast Asia, and Eastern Europe—driven by unprecedented central bank purchases. Western investors have yet to fully wake up to what’s happening here.”
China’s aggressive gold accumulation underscores this shift. The country resumed its gold purchases last year, following a six-month pause, as part of a broader strategy to reduce its dependence on the U.S. dollar. “China isn’t just buying gold for financial reasons,” Smallwood said. “It’s about sovereignty and preparing for a future where the U.S. dollar is no longer the global reserve currency.”
Smallwood also highlighted an unusual market phenomenon: gold maintaining strength alongside a strong U.S. dollar. “It’s highly atypical to see gold perform well in tandem with a strong dollar,” he said. “It speaks to a global loss of faith in fiat currencies. Central banks want assets that are immune to political manipulation, and gold is the ultimate store of value.”
Silver: An industrial powerhouse and an undervalued opportunity
Silver, trading at almost $30 an ounce after gaining around 30% in 2024, plays an increasingly critical role in modern technologies. Smallwood painted a picture of a metal in high demand but in short supply. “We’ve hit peak silver production,” he noted. “The last time we saw significant production growth was in 2017 or 2018. Meanwhile, demand has exploded, with over two-thirds of silver now consumed in high-efficiency electronics, renewable energy technologies, and even medical applications.”
Despite its importance, silver has struggled to keep pace with gold in recent years, partially due to retail investors seeking higher returns in cryptocurrencies. “Silver has always been the higher-beta play, attracting investors looking for volatility and outsized returns,” Smallwood explained. “Many of those investors have found their ‘fix’ in crypto, but I believe silver will outperform gold when it catches up.”
Adding to the metal’s appeal, Russia has signaled its intent to include silver in its central bank reserves. “If silver starts to be treated as a store of value alongside gold, the upside potential is immense,” Smallwood said, pointing to the historically high gold-to-silver ratio as evidence that silver remains undervalued.
Canada’s political reset: What it means for resources
Smallwood also weighed in on Canadian Prime Minister Justin Trudeau earlier this month, just before his resignation. “It’s hard to see a downside with a change in government,” Smallwood said candidly. “Canada has been lagging in resource development, largely due to regulatory hurdles and lack of direction. This is an opportunity for the country to realign its priorities and unlock its resource potential.”
He criticized the current regulatory environment, which has left many projects stalled. “There’s a long list of mining projects, both in Canada and the U.S., that are ready to go but are tied up in permitting delays,” Smallwood remarked. “It’s frustrating to see opportunities squandered when they could be contributing to our economy and addressing global resource needs.”
Looking ahead: A golden outlook for 2025
Smallwood remained optimistic about the trajectory of precious metals, particularly gold and silver. “We’re likely to see gold break past $3,000 an ounce this year,” he predicted. “And silver could hit $40 if industrial demand and retail interest converge.”
As Wheaton Precious Metals continues to expand its global footprint, the company is on track to achieve a 10% annual production growth over the next five years, reaching nearly one million gold-equivalent ounces annually. Smallwood attributed this success to Wheaton’s focus on low-cost, high-margin assets in mining-friendly jurisdictions.
“The fundamentals for gold and silver have never been stronger,” Smallwood said. “For investors, it’s not just about hedging against uncertainty—it’s about recognizing the value these metals bring to a changing world.”
To hear Randy Smallwood’s in-depth analysis and gain more insights into the future of gold and silver, watch the video above.
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