Silver prices have been experiencing significant choppiness recently, but analysts remain optimistic about a potential surge in the coming months. Ernest Hoffman, a commodities expert and Crypto and Market Reporter with over 15 years of experience, projects that silver could hit $40 per ounce by summer and reach $50 by the end of the year. Several factors are contributing to this bullish outlook, including anticipated industrial demand, inflation concerns, and the possibility of market manipulations similar to the “Silver Squeeze 2.0” movement.
This phenomenon, driven by retail investors aiming to drive up silver prices through coordinated buying, could lead to a technical breakout and push prices to new highs. During Wednesday’s trading session, silver prices initially fell but began to recover following the release of weaker-than-expected GDP figures from the United States. This economic data boosted interest in precious metals, causing a notable rise in both gold and silver prices shortly after the announcement.
The market is currently experiencing consolidation around the 50-day EMA, an indicator closely watched by traders. If the price breaks above the $34 level, silver could potentially rally towards $35. With sufficient time and a weakening US dollar, the market may reach these highs and possibly break out further.
The gold-silver ratio, which measures the value of silver relative to gold, has recently surged as gold prices rally while silver underperforms.
Anticipated silver surge and demand
The ratio is currently around 100, meaning gold is approximately 100 times the price of silver.
This represents an extreme deviation from historical averages, which have ranged from 32 to 125 between 2000 and 2025. Similar divergences between gold and silver have occurred in the past, with silver eventually playing “catch-up” after lagging behind gold. However, the lag times have varied.
Factors such as industrial demand, geopolitical uncertainty, and inflation fears have contributed to the current divergence. Approximately half of silver demand is driven by industrial sectors, such as electronics, photovoltaics, and chemicals. Concerns about a global manufacturing slowdown and elevated inventories have capped silver’s potential gains, while investors have flocked to gold as a safe haven asset.
History shows that once macroeconomic uncertainty clears, silver often recovers lost ground quickly. Normalization in the gold-silver ratio could result from either a silver rally or a gold correction. Investors can express this view through a long position in silver and a short position in gold, potentially using CME Micro Silver and Micro Gold futures.