Precious metals market analyst at Commerzbank is bullish on silver prices for 2025, as the metal looks to end the current year in lockstep with gold.
The current gold/silver ratio is trading around 85 points, roughly where it started the year, even as prices have risen 30% in 2024. Although silver has dropped sharply from last month’s high of $35 an ounce, prices are on track to end the year at 12-year high.
“In other words, silver is still cheap compared to gold. Like gold, silver is being supported by the interest rate cuts already implemented and the prospect of further cuts by central banks. This is because silver is also an investment metal, despite its high industrial use,” Kitco quotes Carsten Fritsch, analyst at Commerzbank, as saying.
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.
“Silver demand for photovoltaics has more than doubled in the last three years and now almost equals the demand for bars and coins. Rising industrial demand will ultimately ensure that physical silver demand, excluding ETFs, will also increase slightly this year, reaching its second-highest level after 2022,” he said.
Analysts expect the silver market to experience a supply deficit for the fourth consecutive year in 2024, and another one in 2025, which will support the precious metal’s long-term price outlook. Fritsch predicts the silver price to rise to $32 per ounce by the middle of next year and to $33 per ounce by the end of 2025.
Theodor Lisovoy, Managing Editor, Rough&Polished
