Silver (XAG/USD) rose on Thursday, according to FXStreet data, trading at $64.05 per troy ounce, up 1.05% from $63.39 on Wednesday. On a per-gram basis, the metal was priced at $2.06, while the year-to-date move showed a 9.89% decline.
The Gold/Silver ratio, a measure of how many ounces of silver are needed to match the value of one ounce of gold, stood at 63.78 on Thursday versus 64.24 the day before. Silver’s price is influenced by macro drivers including US Dollar moves, interest-rate expectations and safe-haven demand, alongside supply from mining and recycling, and industrial usage in areas such as electronics and solar energy. It also tends to track gold, with the ratio used to gauge relative valuation between the two metals.
Momentum And Macro Drivers Supporting Silver
We see silver is bouncing back, trading at $64.05 today. This is a notable change, especially since the metal is still down nearly 10% for the year. This recent strength suggests a potential shift in momentum we should watch closely.
The broader economic picture seems to be supporting this move. With recent CPI data showing inflation moderating to 3.2%, talk of future interest rate cuts is growing, which is typically good for silver. A weaker U.S. dollar, which is currently trading near a two-month low, further removes a headwind for prices.
Industrial Demand, Ratio Trends, And Trading Opportunities
We are paying close attention to silver’s industrial demand, which remains robust. The solar energy sector is expected to grow by over 20% this year, consuming significant amounts of silver for panel production. This steady demand provides a strong floor under the price.
The Gold/Silver ratio falling to 63.78 is a key signal for us. Historically, this ratio has often been much higher, reaching over 85 earlier in the year and suggesting silver was undervalued compared to gold. This ongoing correction indicates that silver is now outperforming gold, a trend that could continue.
For the coming weeks, we believe this presents an opportunity to gain upside exposure. We are considering buying call options to capitalize on further price increases while defining our risk. The recent volatility also makes option premiums attractive for structuring these trades.
