Silver's still on fire: Can gold keep up?
The gold market is building new support around $4,200 an ounce as it maintains a solid bullish uptrend; however, silver continues to steal the show as it heads into the weekend at another record high above $58 an ounce.
Not only has silver seen strong follow-through buying this week, but pullbacks have been shallow with support holding near last week’s high around $56. Adding to its bullish achievements, silver has significantly outperformed gold, with the gold/silver ratio set to end the week near 72 points—a fresh four-year low.
Given silver’s technical momentum, some analysts say the ratio could retest long-term support at 65 points.
In last week’s note, I highlighted how the green-energy transition is driving industrial demand for silver and has been the primary factor behind five consecutive years of market deficits. Research from the World Economic Forum suggests that the value of the green-energy economy could reach $7 trillion by 2030, up from its current annual output of $5 trillion.
This past week also gave us a clearer view of retail investor demand, which remains the driving force behind silver’s rally to record highs. According to monthly CME trade data, silver futures saw average daily volume of 108,000 contracts, up 22% from November 2024. At the same time, micro silver futures — one-fifth the size of the standard 5,000-ounce contract — posted average daily volumes of 75,000 contracts, up 238% from a year ago.
We also now have a better understanding of what is supporting silver demand in India, the world’s second-largest silver-consuming nation. Unprecedented purchases in October and November put heavy pressure on London’s physical over-the-counter market, creating supply-chain and liquidity issues that have yet to be fully resolved.
One factor behind rising Indian demand is silver’s renewed role as a monetary metal in the domestic economy, according to the latest report from Metals Focus. Last month, the RBI announced a new rule that will allow citizens, beginning April 1, 2026, to pledge silver assets for credit through banks, non-banking financial companies, and housing finance firms under a uniform lending framework.
“This measure could help mobilise India’s vast household silver holdings, broaden access to formal credit, and formally recognise silver as a mainstream collateral asset,” Metals Focus said. “While loans against silver have existed informally for decades, the RBI’s framework marks the first formal recognition of silver within the regulated collateral ecosystem.”
The U.K. research firm added that silver-backed lending is expected to complement, not displace, gold-backed loans or traditional credit channels.
Although silver has already made significant gains this year, there still appears to be substantial potential in the marketplace. At the same time, investors should remain cautious. Silver is a smaller and more volatile market than gold, making price swings more pronounced.
