Key Points
- Gold hit a record $4,480 per ounce, rising 71% in a year. Silver prices surged 137% this year, hitting a record $69.09.
- The gold-silver ratio narrowed from 104:1 to 64:1 since April.
- Falling interest rates are boosting silver’s appeal for industrial use.
- Silver is often used as a cheaper alternative to gold for inflation protection.
Gold and silver are having a massive month, with both metals hitting brand-new records on Monday. Gold reached over $4,480 an ounce, marking a 71% jump compared to last year. But the real star of the show is silver. It increased by more than 2% to $69.09. When you look at the whole year, silver has surged 137%, easily beating gold’s already impressive performance.
Experts say this is a classic move for precious metals. Typically, gold starts a rally first while silver lags. Then, silver suddenly rises sharply and makes substantial gains very quickly to catch up. We can see this clearly in the “gold-silver ratio.” Back in April, it took 104 ounces of silver to buy just one ounce of gold. Today, that gap has narrowed significantly, and the ratio has decreased to 64:1.
There are several reasons why silver is moving so rapidly right now. First, many people refer to it as “poor man’s gold.” Since it costs much less than gold per ounce, it’s a more affordable way for everyday people to own physical metal and protect themselves against inflation. Second, silver isn’t just an investment; it’s a vital industrial material. Factories use it in solar panels and various electronics.
Now that interest rates are falling, investors expect companies to increase construction and technology projects that require silver’s electrical and thermal conductivity.
Many people use these metals as a “safe haven.” When the economy feels shaky, or prices for groceries and rent go up, they buy gold and silver to protect their savings. These assets usually don’t move the same way as the stock market, which helps balance out an investor’s portfolio.
However, silver carries more risk than gold. Because it is used in manufacturing, its price can swing wildly based on industrial demand. It is also less “liquid” than gold, meaning it can be a bit harder to sell quickly for cash. Whether you buy physical coins or digital funds, you should always weigh the risks before jumping in at these record-high prices.
