June 25 (Reuters) - Silver has lost roughly half its value since peaking at an all-time high in January amid a broad shakeout in precious metals prices. But it has also dropped by more than a third against gold, and charts suggest it is knocking on the door of levels that could spark further losses against the yellow metal.
The troubles for both gold and silver started on January 30, when speculation that the Federal Reserve might be less inclined to cut interest rates swept through the market. Rising fears of inflation since the start of the Iran war exacerbated this sentiment as markets increasingly prepared for the possibility of rate hikes in the U.S.
Silver was hit much harder than gold, in part due to its status as an industrial metal, which increases its sensitivity to shifts in appetite among investors to take risks. Silver had also had a much bigger rally than gold, so it had more to give back in the subsequent retreat.
Gold's rise against silver appears to be gaining momentum after recently breaking above the 200-day moving average at $66.76, according to LSEG data. Technical analysts use the 200-day moving average to smooth out price changes to more clearly discern trends.
The next big target in gold's rise versus silver is $70, which will be an important psychological level given that markets often focus on big round numbers. A sustainable advance above there would increase expectations that it would challenge the February 6 high of $72.74 and then $75.25, the halfway point of gold's fall versus silver since April 2025.
However, if silver were to mount a comeback, it would first have to pull gold back below the 200-day moving average before moving on to the June 22 low of $62.68. A drop below $60.56, which is the halfway point of the price range from May and June, would increase momentum in silver's favor.
What the chart shows:
Gold has been rising versus silver since January
Gold-to-silver ratio breaks above the 200-day moving average, signaling further silver weakness
Next upside target for the ratio is 70, with 72.74 as a key resistance level beyond that
(Daily markets commentary from Reuters analysts on the signals financial charts are sending - and what they might mean.)
Paul Spirgel is a Reuters market analyst. The views expressed are his own. Editing by Burton Frierson and Matthew Lewis
