On Wednesday morning, spot silver climbed to $59.47 per ounce, a notable increase of 6.3% from its closing price of $55.9 at the end of June. At the same time, the price of gold rose by 2.4% to $4,119.04 per ounce. Both precious metals remain far below their record levels set in late January when gold peaked at $5,589.38 and silver surged to $121.67. These all-time highs were driven by a strong market rally that lasted into 2025, but recent dynamics have pushed prices well below those levels.
ING commodities strategists Warren Patterson and Ewa Manthey pointed out in a recent report that the recent price rise in both metals is due to investors capitalizing on low prices after a period of decline, rather than any significant shift in global economic or geopolitical conditions. They emphasized that the uptick reflects a buying opportunity, but does not indicate a fundamental change in the broader market landscape.
Silver may gain, gold may struggle
The ING report suggests that silver may outperform gold in the coming period. According to the strategists, this is likely due to its dual appeal as a safe-haven asset and its connection to the industrial metals market, especially copper. In contrast, gold is more susceptible to changes in energy prices and the future direction of U.S. monetary policy. This divergence in sensitivity to different market factors could lead to divergent performance trends for the two metals in the near term.
Bank of America analysts have raised concerns about gold's outlook, citing a 'death cross' pattern, a technical indicator in which a short-term moving average drops below a long-term one. This pattern is seen as a signal that the trend may reverse, and the analysts warned that gold prices could fall further. They highlighted that gold recently recorded its worst quarter in 13 years, from the end of March to June, and suggested that the metal could face a more prolonged and severe correction.
UBS sees little near-term hope for silver
UBS has lowered its price target for silver, moving from around $55 per ounce to a range of $48 to $50. In a July 20 note, strategist Dominic Schnider explained that the bank remains cautious about silver's short-term prospects. Factors like ongoing tensions in the Middle East, a strong U.S. dollar, and higher opportunity costs are weighing on investor interest, he said. Silver, according to Schnider, lacks a strong reason to rally in the immediate future, with investment demand fluctuating and prices failing to establish a stable foundation.
Mining executives remain bullish
Diane Garrett, CEO and executive chair of U.S.-based Hycroft Mining, offered a more optimistic view during an appearance on CNBC's 'Squawk Box Europe.' She described the current drop in gold and silver prices as a normal correction, not the breakdown of a long-term upward trend. Garrett noted that gold's fundamental strength is intact, with central banks continuing to buy the metal for 17 consecutive months. She argued that gold is becoming an essential part of the financial system, as investors seek assets backed by tangible value instead of those tied to another country’s debt.
Garrett also emphasized silver’s unique position in the market, especially in industrial sectors. She pointed out that silver is not only a monetary metal but a critical component in modern technologies like artificial intelligence and supercomputers. Silver's role in these industries, she said, is non-substitutable, which underpins its long-term demand. Despite the recent dip in prices, Garrett remains confident in the underlying story for both gold and silver, believing that the fundamentals continue to support strong performance.