Silver prices increased on Friday, reaching $31.45 per troy ounce, a rise of 0.73% from the previous day. Since the start of the year, prices have gone up by 8.84%.
The Gold/Silver ratio was 102.26 on Friday, up from 101.72. This ratio indicates how many ounces of Silver are needed to match the value of one ounce of Gold.
Factors Influencing Silver Prices
Silver’s price can be influenced by factors such as geopolitical instability and interest rates. A strong US Dollar generally constrains Silver prices, while weak dollar conditions tend to increase them.
Industrial demand plays a vital role as Silver is extensively used in sectors like electronics and solar energy. Economic dynamics in countries like the US and China also contribute to price variations.
Typically, Silver prices align with Gold movements as both are recognised as safe-haven assets. The Gold/Silver ratio may influence perceptions of their relative value.
Given the increase in silver prices up to $31.45 per troy ounce—a 0.73% move within a day—and a cumulative gain of 8.84% year-to-date, sentiment has clearly leaned supportive in recent sessions. The rise, though not dramatic, has been consistent enough that there’s growing attention around silver’s relative value in broader metals markets. The concurrent uptick in the Gold/Silver ratio to 102.26 indicates that despite silver’s gains, it has not outperformed gold just yet. That matters because many follow this ratio as a gauge to identify undervalued or overvalued conditions between the two.
Impact Of Gold And Silver Ratio
The ratio matters due to how it’s used during rebalancing or pairs trading within metals. A higher number—like the 102.26 figure now—suggests that silver remains historically less expensive than gold on a comparative basis. This can often draw fresh interest from those looking to capitalise on potential narrowing of the spread. For strategies that use this relationship, timing becomes essential—those entering too early might sit in drawdown as the ratio widens further.
We’re also facing a combination of macroeconomic influences that are rarely aligned. While geopolitical unpredictability tends to fuel flows into both gold and silver—as stores of value—it interacts differently with interest rate expectations. Silver, being a hybrid between industrial material and monetary metal, may find tension when economic data doesn’t point clearly in one direction.
Higher US interest rates support the dollar. That, in turn, places pressure on dollar-denominated assets like silver, making it more costly for non-dollar buyers. We’ve seen that repeatedly. However, current dollar resilience hasn’t entirely suppressed silver’s upward path—suggesting that demand from sectors like solar and electronics may be counteracting that pressure.
Strong industrial consumption, especially from East Asia, adds another support beam. With China signalling steady economic activity and the US avoiding a hard landing, demand from manufacturers remains present enough to lend comfort about floor prices. Here, it’s worth watching PMI data out of both countries. A drift lower would erode confidence fast.
As for alignment with gold, there are clear tie-ins. Both metals often rally amid risk-off trading, but silver tends to be more volatile due to thinner liquidity and its dual function. That’s why when gold moves, silver often amplifies the move—it doesn’t just follow, it reacts, for better or worse.
Looking forward, we’re closely tracking real yields, currency moves, and inflation expectations. For positioning derived from volatility or spreads, moments of macro shifts—involving either dollar momentum or interest rate repricing—will likely offer opportunity. As always, alignment between correlation strategies and macro inputs remains key. Take note of any scheduled central bank commentary next week, especially if it relates to growth or inflation revisions—those will shape expectations more than most headlines.
