Investors are increasingly turning their attention to other precious metals. Gold, in some respects, has become prohibitively expensive, particularly within the jewellery sector. Consequently, we've recently observed significant surges in the prices of silver and platinum, metals that have historically been treated primarily as industrial commodities.
Silver is attempting to catch up with gold, having yielded a return of approximately 24% over the past 12 months, while gold delivered a 44% return during the same period. Among commodities this year (changes since the beginning of the year), there's been a shift in the leadership table. Platinum has already gained around 36%, while gold is up 25%. Silver continues to lag somewhat, with a return of approximately 24%.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Commodity Futures Returns (Generic contracts, no prior rolling). Source: Bloomberg Finance LP
The crucial gold-to-silver ratio has experienced a notable decline following the recent surge in silver prices. Just a few days ago, the ratio stood at over 100, but it is currently retreating to around 90 points. Long-term averages for this price ratio typically fluctuate at significantly lower levels, ranging from 60-80. This suggests that if the bull market in precious metals continues, silver still has considerable room for potential upside.
Gold-to-Silver Ratio. Source: Bloomberg Finance LP
The rise in prices to their highest levels since 2012 has reawakened investors who, in recent years, had overlooked strong bullish fundamentals. Data from the Silver Institute indicates that 2025 could mark the seventh consecutive year of a significant deficit (including demand from ETF funds). 2024 saw another robust increase in industrial demand, primarily in photovoltaics, a trend most likely to continue this year. Demand from the jewellery sector and ETFs is also expected to rise, which, coupled with limited supply, could lead to a further increase in the deficit to historically unprecedented levels. A challenge for silver in the context of physical metal investment remains the VAT tax, which applies in most European countries.
Silver ETFs have resumed purchasing the metal, although holdings are still far from the record levels seen around 2020 and 2021. Source: Bloomberg Finance LP
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
