Silver Starts Soaring

The typically close correlation between gold and silver prices seemed to have been nearly forgotten during the first quarter of 2024, as gold substantially outperformed its less precious cousin. But the tables turned with the arrival of April. Even as gold was setting new all-time records, silver was climbing even faster. By the close of trading in the third week of April, silver was up an impressive 19 percent for 2024, outpacing gold’s gain of 14 percent.

Yet silver was still far from its all-time high, which was set in 2011, leading some to believe the silver rally was just getting started.

The gold-silver ratio, a long-followed comparison of the two prices, stood at 84, meaning one ounce of gold would buy 84 ounces of silver. Compare that to 2011, when one ounce of gold bought as few as 30 ounces of silver.

Silver has many more industrial uses than gold, and therefore it can be more subject to the ups and downs of the economy. So, silver’s springtime rally is likely gaining support from a pickup in economic activity.

The Silver Institute forecasts demand for the metal will grow nine percent in 2024 to a new record high, as clean energy projects, particularly solar panels, utilize more silver, and as a rising number of drivers purchase electric vehicles, which rely upon silver for its excellent conductivity.  Demand is predicted to reach 711 million ounces. At that rate, the Silver Institute says there will be a supply shortage, another factor justifying higher prices.