In 2023, silver has outpaced gold and may continue to do so in the coming months, according to expert analyses.
Gold has surged by over 52% this year, climbing from $2,659 per ounce at the end of last year to $4,017.18 by October 11.
Silver has skyrocketed from $28.78 per ounce last year to $50 over the weekend, marking an impressive 73% increase year-to-date.
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George Pavel, Middle East general manager at Naga.com, suggests that silver’s bullish trend might persist, driven by strong market fundamentals.
George Pavel
“The market has faced a prolonged structural supply deficit, with demand consistently outstripping supply. This demand is fueled by industrial uses in green energy and technology, as well as renewed interest in safe-haven investment,” Pavel stated.
Michael Brown, a senior research strategist at Pepperstone, remains optimistic about silver’s outlook, noting that demand for precious metals remains robust, even if the initial surge above $50 per ounce prompted some profit-taking.
Michael Brown
Will silver maintain its shine over gold?
Brown mentioned that the physical demand for silver remains strong.
“Moreover, using ETF holdings as an indicator, demand is still below the peaks seen in late 2021, suggesting potential for further growth. Silver’s rally has significantly outpaced gold this year and may continue to do so in the medium term, given its typical role as a higher-beta asset compared to bullion,” he added.
Vijay Valecha, Century Financial’s chief investment officer, anticipates the silver rally will persist in the near to mid-term if it secures a confirmed breakout above $50 an ounce.
With macroeconomic factors boosting interest in hard assets and inflation hedges, combined with silver’s dual role as both a monetary and industrial metal, Valecha foresees a multi-year bullish cycle for silver rather than a temporary surge.
Vijay Valecha
“Silver is likely to outperform gold in the near to mid-term. The sharp decline in the gold-to-silver ratio highlights silver’s increasing strength within the precious metals sector, accentuated by its significant industrial demand drivers like solar photovoltaics, EVs, and 5G, which are not shared by gold. While gold benefits from safe-haven flows, silver’s leveraged exposure to economic recovery and green tech growth could lead to superior returns, especially as real yields drop and monetary easing picks up,” explained Century Financial’s chief investment officer.
Capitalize on a missed golden opportunity
Valecha believes silver offers a promising opportunity for UAE investors who missed the recent gold rally.
“After decades of consolidation, silver is on the brink of its own secular bull cycle, with a technically strong structure (cup-and-handle breakout) and structural tailwinds that could drive it to new highs, far exceeding gold’s recent performance,” he said, urging: “We recommend prioritizing silver over gold for new allocations in the near to mid-term. While gold remains a reliable macro-hedge against uncertainty, silver is more of a high-beta play. The main drivers are industrial demand surges and outperformance signals like the falling gold-to-silver ratio, which offer greater upside potential in this environment.”
He advised investors to view a breakout above $50 per ounce as a trigger for entry, with a long-term target of $75-$80 an ounce, but always with risk management in mind due to silver’s volatility.
