Gold has been hogging the spotlight, surging higher and setting new records on what seems like a daily basis. Meanwhile, silver has been kind of lost in the shadows.
When will it be silver's turn to shine?
In this episode of the Money Metals' Midweek Memo podcast, host Mike Maharrey takes a deep dive into both the fundamentals and the technicals of the silver market and argues that the white metal is poised to upstage gold in the spotlight with an explosive move higher. It's just a matter of time.
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Mike opens the show reminiscing about family hikes when his kids were little.
"Every time, one of the three of them would lag behind. They were tired. Or they were bored. Or they got distracted by a butterfly. It was always something. But you know what? They always caught up. Never once did we leave a kid behind – although it was kind of tempting.
"Well, gold is on a hike right now, and it is keeping up a frenetic pace. It’s little brother, silver, is lagging. A lot of people are worried about little brother, but I have a feeling he’s going to catch up.
"At least, that’s what history suggests."
Mike summarizes the past week in the gold market, noting it hit yet another new record high, and highlights some of the factors driving the bulls forward.
"Well – a lot of things. Central bank gold buying has put a floor on the gold price for well over a year. Then you have de-dollarization. You have a trade war. You have geopolitical uncertainty. You have inflation. My friend analyst Brien Lundin made a really good point in a recent article. Anyone who focuses on any single factor behind gold’s surge is missing the big picture. He wrote, 'Gold has been telling us that it’s not one thing. It’s everything.'"
Mike also touches on President Trump's recent demand for interest rate cuts, noting that it once again underscores the Catch-22 the central bank finds itself in.
"I’m not going to go in depth on this subject in the show today because I want to talk about silver, but I encourage you to read the article I wrote yesterday. I’ll link to it. I explain why Trump is jonesing for rate cuts. Why he’s wrong about claiming there is “virtually no inflation.” Hint – while prices have come down, the money supply is going up, which is, by definition, and will inevitably lead to higher prices. And I explain why Trump will probably get his wish at some point in the near future, but that’s not a good thing – unless you like paying more for everything."
Shifting focus to the silver market, Mike notes that while many perceive it as a laggard, silver is not doing horribly.
"It is up a little over 12 percent. However, it has failed to close the gap with gold, and that has many investors questioning what’s going on with the white metal."
He turns his attention to the gold-silver ratio.
"When I was prepping the show, the gold-silver ratio was just over 103:1. That means it takes about 103 ounces of silver to buy an ounce of gold. Yesterday morning, it was as high as 104:1. I’ll just tell you up front – that’s not normal...
"This is an extremely wide spread from a historical perspective and indicates that silver remains drastically underpriced compared to gold. More significantly, these extremely wide gold-silver ratios don’t tend to last long. They eventually snap back to the mean. And when that happens, it’s generally a very fast move."
Mike walks listeners through some of the historical gold-silver ratio data to put today's numbers into perspective.
So, what is this telling us?
"Either silver is way undervalued, or gold is way overvalued. Given the constant devaluation of fiat dollars, it’s really hard to argue gold is overvalued. In fact, I would argue it's undervalued too. Just not as much as silver. From a historical perspective, when you see gold-silver ratios well above that historical average, it tells you that silver is underpriced compared to gold, and there is a strong possibility that silver will go on a bull run to close that gap. Historically, this has often happened in the midst of a gold bull rally, with silver outperforming gold."
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Mike points out that the silver supply and demand dynamics are also extremely bullish. Industrial demand set a record in 2024, and the market recorded its fourth straight structural deficit. Gold demand outstripped supply by 148.9 million ounces. That drove the four-year market shortfall to 678 million ounces, the equivalent of 10 months of mining supply in 2024. And this was with tepid investment demand -- especially in the West.
Mike asks a key question: How big will the supply deficit grow when Western investors start pouring into the market?
"Now, stop and think about this. When investors get in on the action – and the will – that supply-demand gap could explode. And silver isn’t priced for these market dynamics."
Mike summed it up this way.
"The bottom line is that silver appears to be on sale. Not to sound like a TV huckster, but these prices probably won't last. Now is the time to take advantage of this historically wide gold-silver ratio. Nobody knows when it will snap back to more normal levels, but if history is any indication, it will. And when it does, it will happen fast."
Mike ends the show urging listeners not to miss out on "silver on sale." He recommends calling 800-800-1865 and talking with a Money Metals' precious metals specialist today.
Articles Mentioned in the Show
Trump Wants Interest Rate Cuts; Be Careful What You Wish For!
Silver Market Records Fourth Straight Supply Deficit Amidst Record Industrial Demand
About the Author
Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
