Silver has been on a remarkable run, fueled by robust investment and industrial demand. The precious metal climbed past $30 per ounce, its highest level since January 2013, and is up more than 25% year-to-date. While exchange-traded funds (ETFs) have shown little interest in silver, physical sales have increased since the metal appeared to be undervalued earlier in the year. 

The gold-to-silver ratio, a measure of the relative value of the two precious metals, exceeded 90 back in January, the widest spread since September 2022. This ratio has since narrowed to around 80 and is estimated to drop further to 70 if the Federal Reserve cuts rates and the US economy remains resilient. 

The chances of Fed rate reductions in 2024 have been bolstered by earlier US consumer inflation data and a key monthly jobs report. However, these expectations have been partially countered by rising export and import prices and hawkish comments from policymakers. 

Meanwhile, silver has continued to benefit from its use in solar panels, an industry expected to reach record levels this year. This robust demand from the solar sector is projected to push the silver market into its fourth consecutive deficit. 

(Silver Price Yearly Chart) 

Driven by a confluence of factors, including heightened anticipation of Federal Reserve interest rate cuts, substantial central bank purchasing, and a surge in safe-haven demand, gold soared beyond the $2,400 per ounce mark on Friday, establishing a new all-time high. 

(Gold Price Yearly Chart) 

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