Category: Silver

The closing act of 2024 is full of uncertainty, volatility, and outright fear as economies falter and geopolitical tensions rise. Investors are eagerly searching for safe havens to protect against potential market blunders, but many aren’t sure which asset to hold.

In this week’s The Gold Spot, Precious Metals Advisors Joe Elkjer and Richard Otto discuss the merit of physical gold vs silver heading into 2025 and if Bitcoin deserves a spot in your portfolio.

Should you buy gold or silver?

After a sustained precious metals rally throughout 2024, investors wonder if they should buy gold or silver heading into 2025. In reality, as with all assets, the “best” choice depends on each person’s specific circumstances and investment goals.

“There’s not a one-size-fits-all when it comes to precious metals. We need to dig into what your needs are and what you’re trying to accomplish to find what’s right for you.”

Joe Elkjer

Precious Metals Advisor

Both gold and silver boast thousands of years as investments, positioning both as stable stores of value and preservers of wealth. Their performances in 2024 and price predictions for 2025 only reinforce this notion.

Related Video: Why Investing in Gold & Silver is NOT a Cookie-Cutter Approach

Gold

Gold entered this year at a respectable $2,063/oz before being catapulted to new heights. The yellow metal has gained over 30% in the past year after a strong recovery from a post-election dip.

This powerhouse rally forced experts to raise their gold price predictions multiple times throughout 2024, as gold easily crossed price hurdles. At the same time, central banks have aggressively increased their reserves, notching a fresh record in Q3 of 2024, following consecutive years of exceptionally high demand.

Silver

Silver didn’t make as many headlines as gold, but it yielded a similar return for investors. At the beginning of the year, the shiny metal clocked in at just under $24/oz before surging to nearly $35/oz. That’s more than a 45% climb!

Although some central banks (Russia, most notably) are topping off their gold reserves with silver, silver prices have been mainly driven by a supply-and-demand imbalance. While the silver supply has remained stagnant for the better part of 14 years, industrial demand is picking up speed, which is a bullish setup for silver prices.

Historically, silver’s price action lags behind gold’s moves by roughly 12 to 15 months. The yellow metal’s massive rally launched about that long ago, meaning 2025 could be a huge opportunity for silver to move further to the upside.

What about Bitcoin? Bitcoin vs Gold vs Silver

After a years-long dip, Bitcoin has surged to new highs, breaking through the $100,000 barrier earlier this month. Spurred by Trump’s victory, cryptocurrencies are experiencing renewed interest from retail and institutional investors. This buzz and impressive evaluations make many people wonder if they should choose these digital currencies over gold and silver.

You really can’t compare gold and silver to Bitcoin.

– Precious Metals Advisor Joe Elkjer

The truth is these assets aren’t in the same ballpark. While Bitcoin’s volatility and speculation can lead to significant gains (and losses), gold and silver have always been about sustainability, stability, protection, and long-term growth.

There’s a reason central banks own physical gold bullion instead of cryptocurrency: It’s not inherently valuable. Federal Reserve Chair Jerome Powell was recently asked if he owns Bitcoin, and he said he wasn’t allowed to, highlighting the risk of government control.

Ray Dalio, the founder of Bridgewater Associates, summed it up well, describing Bitcoin as a “speculative vehicle” that “doesn’t work” as a reserve asset. Similar to central banks, the billionaire said he prefers gold.

Don’t Wait to Buy Gold, Buy Gold and Wait

Even though an ounce of gold remains less valuable than a single Bitcoin, the focus is on proof of performance rather than raw numbers. For millennia, gold and silver have been used as stores of value and mediums of exchange, compared to the recent and volatile birth of cryptocurrency.

“If you’re looking to preserve and protect, nothing beats having physical gold and silver in your hand.”

Joe Elkjer

Precious Metals Advisor

Interested in learning more about diversifying with precious metals? Get your FREE COPY of our Precious Metals Investment Guide today! It covers everything you should know about investing in gold and silver for optimal protection, growth, and security.

Silver remains at bargain prices despite surging more than 30% in 2024. Commerzbank analysts emphasize the shiny metal’s relatively affordable price compared to gold. This undervaluation, in tandem with a bullish 2025 outlook, presents investors with a potentially valuable yet time-limited entry point.

Silver is On Sale!

Silver is one of the highest-yielding assets of 2024, outshining gold and the stock market. When measured trough to peak, the shiny metal rose more than 57%. Even following a post-election slump, silver still clings to nearly 30% gains on the year.

As investors mull over investing in gold or silver for next year, Commerzbank is signaling silver’s undervalued position. The banking giant points to two primary factors underlying its stance: the gold-to-silver ratio and silver’s projected growth.

Gold-to-Silver Ratio

The gold-to-silver ratio simply measures how many ounces of silver are required to buy one ounce of gold. This widely used metric is used to calculate the relative value of silver to the yellow metal. When the ratio rises above 80:1, silver is generally considered cheap. Currently, the ratio stands at 85:1, indicating discounted silver prices. For reference, this measurement has bounced between 50:1 and 70:1 for most of the 21st century. Extreme deviations usually indicate serious economic declines.

Silver Price Predictions

Commerzbank also cites healthy price forecasts to indicate silver’s undervalued position. After charting several relative highs throughout 2024, the average silver outlook remains bullish.

Many 2025 silver price predictions have silver topping $35 and even $40, representing 16% and 33% gains from current levels, respectively. Commerzbank set a target of $32 at the beginning of the year and $33 by the end. In other words, the bank’s research team sees prices surging roughly 10% over the next year.

Key Drivers of Silver’s Future Gains

Interest Rate Cuts

The Federal Reserve’s monetary easing policies are creating firm soil for silver prices to sprout to new highs. The Commerzbank report indicates that “silver is being supported by the interest rate cuts already implemented and the prospect of further cuts by central banks.” Generally, lower rates encourage investors to leave dollar-backed assets as potential yields diminish. Safe-haven assets such as gold and silver tend to be the beneficiaries of this exodus as investors look for more stable and protective investments.

Growing Industrial Demand

Industrial demand is on track for a 7% surge in 2024 as one of the heaviest contributors to global silver consumption which is expected to hit the second-highest level ever at 1.21 billion. Commerzbank anticipates heightened industrial demand in 2025, especially from the rapidly growing renewable energy sector. This increased application for silver, driven by its unique properties, is anticipated to elevate silver prices throughout 2025 as supply struggles to keep pace with ballooning renewable demand.

Steep Supply Deficits

The silver supply is projected to enter another massive deficit in 2025, an alarming trend it’s maintained for the past 14 years. Silver production has struggled to keep up with consumption for various reasons including outsized demand, expensive mining operations, and supply chain challenges. This stagnant supply, combined with booming industrial demand, means more buyers are outbidding for fewer resources. The resulting supply-demand tension usually makes for bullish silver prices.