In 2025, silver is expected to be more profitable than gold with a greater potential upside for the price.
This year, gold and silver will continue to dominate the investment market.
Ole Hansen is the head of Saxo Bank’s commodity strategy. He believes silver has more potential than gold in this year and that the outlook for the price will be positive.
Gold and silver both had stellar years in 2024. Silver prices rose by over 20%, and gold prices rose 27% in the past year.
Silver was able to generate a higher return than gold at one time in the year 2024.
Prices of gold and silver in 2025
Hansen, according to Kitco.com, forecasts that gold prices will rise to $2.900 an ounce in this year. This represents a 7% increase from the current level.
Hansen, however, believes silver’s potential is greater and that prices could reach 38 dollars an ounce by 2025. It is a 30% increase from the current level.
The March COMEX silver contract was trading at $31.090 an ounce as of the writing. This is a 0.2% decrease. The gold contract for February was $2,734.74 an ounce. This is down 0.5% compared to the previous closing.
Although gold returns will be lower than silver, precious metals are expected to continue being a valuable asset in 2018.
In the future, gold, which has been historically valued for its intrinsic value and stability, will play an important role in providing a secure asset.
This is why, during periods of market instability, economic insecurity, and geopolitical tensions investors may turn to gold to safeguard their wealth.
The safe haven value of gold
Gold’s appeal as a store of wealth and currency is based on its scarcity and resistance to inflation.
Hansen stated that the demand for investment metals is a result of an uncertain geopolitical environment, in which global tensions, economic changes, and other factors have led to investors seeking safer assets. This trend shows no sign of abating anytime soon.
Investors have also turned to precious metals to protect themselves from economic instabilities due to concerns over the mounting debt around the world, especially in America.
Investors will have to wait for the Federal Reserve’s new monetary policy, he said.
A hawkish US central bank could boost the dollar, and cause volatility on the precious metals markets.
The markets now only expect one rate reduction this year, which is a stark contrast to expectations that were made a few short months ago.
Silver’s dual role
Hansen is, however, more positive about the silver market due to its dual roles.
Silver is used in industrial applications, so the demand for this metal will likely increase dramatically over the next few years.
The use of lithium in the batteries for electric vehicles (EVs) makes it an extremely valuable commodity.
Hansen noted:
Increased industrial demand in 2024 helped to create physical tightness on the silver market. Electronics and renewable energies, especially photovoltaic technologies (solar), contributed significantly to this boom. Silver’s supply will likely remain in deficit until 2025 due to the expectation that industrial demand will continue. This could be exacerbated by an increase in demand for ‘paper silver’ through exchange traded funds.
Hansen, according to the Kitco Report, expects that the current gold to silver ratio will decline from 88 points to 75.
Silver’s upside potential this year is due to the increasing electrification in the world economy. The metals used in the electrification of global economies have a greater potential than other construction materials, like copper and aluminium.
Hansen stated that “Among industrial metals we continue to maintain a bullish view of metals supporting the energy transformation, especially copper and aluminium, which is driven by investment in the grid and rapid growth in renewable energies installations, from solar and wind power plants to EVs.”
He added, “On the contrary, we only see limited upsides for the industries that are dependent on the demand of the construction industry, like iron ore, and steel.”
The post Silver is expected to be more profitable than gold by 2025. This post may change as new information unfolds
