Silver Outpaces Gold: Stocking Up Before the 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

Silver continues to grow faster than its “big brother.” The white metal is trading above $40 per ounce for the first time since 2011, as expectations of a Fed rate cut boost investor appetite for precious metals. Since the start of the year, silver has gained over 40% as part of a broader rally with gold, platinum, and palladium.

Lower borrowing costs benefit precious metals, which do not generate interest income. Silver is especially valued for its industrial qualities, and against this backdrop, according to the Silver Institute, the market is entering its fifth year of supply deficit.

Gold and silver traditionally benefit from geopolitical tensions and uncertain financial conditions — such as Trump’s aggressive pressure on the Fed, the high likelihood of rate cuts, and military conflicts.

Silver simply had to catch up with gold’s pace of growth; recall that gold surged in the first quarter. Inflows into silver-backed ETFs have persisted for seven consecutive months.

Over this period, funds have bought more than 100 million ounces of silver. This has reduced freely available reserves in London and created ongoing tension in the market.

Thus, the upward breakout was ensured by global market conditions, and speculators just joined the process. Of course, there were also players deliberately waiting for a pullback and building shorts in XAG/USD. The result was something very similar to a standard short squeeze.

Precious metals also found support amid concerns that they may face special US tariffs after silver was added last week to Washington’s list of critical minerals, which already included palladium and gold.

In the current wave of precious metal growth, gold may again outperform silver, because the Gold/Silver Ratio has now dropped to 85 (whereas previously this level was considered “neutral”). For now, it is a reason to consider re-entering silver purchases.

So we act wisely and avoid unnecessary risks.

Profits to y’all!