The value of silver has soared more than 78% this year, hitting a new record on Monday after surpassing an all-time high set four decades ago, but some economists have warned it may be a riskier trade than gold, despite outperforming the metal so far this year.
Key data
Spot silver rose about 3.5% over the past day to $52.25 an ounce, while silver futures, often used by investors to hedge positions, rose 6.7% to around $50.45 by midday EDT on Monday.
The latest intraday high for spot silver came after the metal broke the $50 threshold on Friday, joining a rally in gold futures during the government shutdown, while surpassing a previous record of $49.95 per ounce set in January 1980.
Inventory in the global silver trading center of London has declined in recent years, but liquidity has disappeared this year: Anant Jatia, chief investment officer at Greenland Investment Management, told Bloomberg that “there is no liquidity available currently,” noting: “What we are seeing in silver is unprecedented.”
Analysts at Goldman Sachs wrote Sunday that silver prices are likely to continue rising amid the government shutdown and expectations of expected interest rate cuts from the Federal Reserve, which is divided over whether to scale back cuts twice more this year.
Silver and gold prices tend to move together and are often favored as safe-haven investments, although Goldman Sachs economists expected “more volatility and downside price risk” for silver than for gold, which is supported by demand from central banks (the US Bullion Depository in Fort Knox, Kentucky, holds 59% of the Treasury’s total supply, or about 147.3 million troy ounces).
Gold, which has also soared to all-time highs recently, will remain a more practical option for central banks to invest in because the value per ounce of gold is significantly higher than that of silver and it is a more scarce resource, analysts argued.
large number
Almost 78%. That’s how much silver prices have risen so far this year, outpacing gold, which is up nearly 56% and setting numerous milestones. Gold prices are up 3.5% over the past week to around $4,113 in early trading on Monday.
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How high will silver prices go?
Bank of America analysts on Monday raised their price forecasts for gold and silver, becoming the first major bank to raise their 2026 outlook for gold to $5,000 an ounce, and for silver to $65 an ounce. The bank similarly warned of potential near-term risks to silver, suggesting prices could become volatile as liquidity grows and demand falls, while noting that silver is likely to remain favored among investors. Silver’s latest liquidity squeeze may have fueled the metal’s recent rally, but the shortage is expected to be short-lived, Goldman Sachs wrote. Higher silver prices in London encourage the metal to “flow back” from the United States and other regions, “gradually restoring liquidity,” according to the bank.
Platinum has also outperformed gold this year
Platinum prices are up 82.5% for the year, the metal’s biggest rally since 2011. Platinum has underperformed gold and silver prices over the past decade as the auto industry has reduced its reliance on the metal, according to CME Group. However, increased demand for electric vehicles has driven up the value of platinum in recent years, and CME Group expects platinum demand to rise as more automakers produce hydrogen fuel cells, which use the metal as a component, while global supply declines.
Key background
Precious metals such as gold and silver have benefited from periods of “elevated” economic and political uncertainty in the US during President Donald Trump’s second term, Goldman Sachs commodities strategist Lina Thompson wrote earlier this year. Gold rose above the $3,000 threshold in March before reaching $4,000 earlier this month. Hedge fund billionaire Ray Dalio called on new investors to rely on gold when other trades, such as stocks, perform poorly, arguing that gold remains “the only asset that performs very well.” Another rally in gold and other precious metals is “underpinned” by the government shutdown, a weaker U.S. dollar, higher hopes for additional interest rate cuts and “distress over tariff-related inflation,” LPL Financial chief technical strategist Adam Turnquist wrote last week.
This article was originally published on Forbes US.
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