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Key Takeaways
- Investors have become more obssessed with silver than the artificial intelligence trade, according to Vanda.
- Citi commodities analysts have boosted their price target on the metal, calling it “gold on steroids.”
Silver is hardly a runner-up prize these days.
Unease caused by international tensions and perceived risks in the U.S.—such as another government shutdown—have driven investors to hard assets and boosted their prices to record highs. Spot gold’s breaching of the $5,000 level topped the podium yesterday, silver has rallied even more furiously than the precious yellow metal.
Spot silver prices are up almost 50% so far this year, beating gold’s more-than-15% gain. Though silver had backed off its all-time intraday high of around $117 as of Tuesday, analysts see it continuing to outperform in the near term: While gold’s rally has been driven in part by central bank purchases and institutional hedging, individual investors have made silver the hot trade of the moment.
Why This Matters to Investors
While central bank purchases have, in part, driven gold to record highs, silver’s rally is driven by a different set of forces—including, analysts say, a lot of retail investor interest.
Analysts have lately called silver “gold on steroids” and “retail’s new favourite toy,” with some likening it to a meme stock. According to Vanda Research, which tracks investment flows from individual investors, silver has become a “hotter” trade than artificial intelligence-darling Nvidia (NVDA) in terms of trading momentum. Yesterday individual investors poured about $171 million into the iShares Silver Trust (SLV), the largest single-day net retail inflow on record for the ETF, according to the firm.
Michael Antonelli, a market strategist for Baird Private Wealth Management, on Tuesday called silver “GameStop (GME) in 2026.” in a social-media post.
Silver is catching bearish attention, too. Trading is split between rally chasers and short-sellers, with the latter betting on a crash via ProShares UltraShort Silver ETF (ZSL), a fund designed to supercharge daily returns from falling prices, Vanda data show.
Emerging-markets investors would appear to to be contributing to the run-up, with prices in Shanghai higher than those in London lately, Citi’s commodities research analysts wrote in a Tuesday note. China’s only silver ETF is suspending new subscription starting tomorrow “in an effort to rein in retail speculation,” the analysts said.
Related Education
Layton and his team don’t expect that to contain demand. They expect silver—what they call “gold on steroids”—to continue to climb until it starts to look “expensive by historical standards” next to gold.
That means if gold trades in the $5,100 to $5,400 range, and the gold-silver ratio—the exchange rate between the two metals—is around 32, the 2011 low, silver would trade as high $170. It would trade at the $300 level if that ratio hits the 1979 low of 14, though Citi sees the latter, as an “extremely unlikely scenario.” The bank today raised its near-term price target to $150 from $100—the second boost this month after the metal rallied through the prior forecast.
One risk to watch out for: “China profit taking prior to Chinese New Year,” Citi said. That’s two weeks away.
This article has been updated since it was first published to incorporate new commentary.