Silver Outpaces Gold: Market Braces for Crisis

#XAGUSD

Key zone: 40.00 - 41.00

Buy: 41.20 (on strong positive fundamentals); target 43.00-43.50; StopLoss 40.50

Sell: 39.50 (after a retest of the 40.50 level); target 38.00-37.50; StopLoss 40.20

The white metal continues to rise faster than gold and, for the first time since 2011, is trading above $40 per ounce. The rally is supported by expectations of a Fed rate cut, which boosts investor appetite for precious metals. Since the beginning of the year, silver has gained more than 40%, moving in line with gold, platinum, and palladium.

Lower borrowing costs are traditionally favorable for assets that do not generate interest income. In the case of silver, an additional factor is its industrial use: according to the Silver Institute, the market is already facing its fifth consecutive year of supply deficit.

Gold and silver traditionally benefit from geopolitical tensions and financial uncertainty, including Trump’s pressure on the Fed, the high likelihood of rate cuts, and military conflicts.

Silver simply had to catch up with its “older brother” in growth rates; recall that gold surged back in the first quarter. Capital inflows into silver-backed ETFs have continued for seven straight months: during this period, funds bought over 100 million ounces, which led to a reduction in London exchange reserves and heightened global market tensions.

Thus, the upward breakout was secured by global market conditions, with speculators only amplifying the move. Many participants who were expecting a pullback had long been increasing shorts on XAG/USD, resulting in a classic short squeeze.

Additional support came from the political side: last week silver was added to the U.S. list of critical minerals, which already includes palladium and gold. This raised concerns about potential special tariffs that Trump could impose at any moment, both for individual countries and globally.

Amid the current rally in precious metals, gold may once again outperform silver. The Gold/Silver Ratio has dropped to 85, though this level was previously considered “neutral.” Now it looks like an argument in favor of new silver purchases.

So we act wisely and avoid unnecessary risks.

Profits to y’all!