Gold Is Hot, Silver Is Hotter

(Illustration by Elias Stein)

Silver futures have shot up some 44% this year, to their highest level since 2011. But by one key metric, silver has more room to run.

Investors have piled into both gold and silver in a year that has seen a reshuffling of global trade, a threat to Federal Reserve independence, and a weakening U.S. dollar . Silver is also a key component of semiconductors. “In my personal account, I just bought a whack-load of gold and silver bars that are heading right to the safe-deposit box,” David Rosenberg, of Rosenberg Research, recently wrote.

Created with Highcharts 9.0.1Why They’re PreciousPrices of both gold and silver have rallied strongly this year. Source: FactSet

Created with Highcharts 9.0.1SilverGold2025Sept.-1001020304050%

Gold is up some 39% in 2025, on pace for its best year since 1979. But silver may be undervalued relative to gold. The gold-to-silver ratio measures how many ounces of silver it takes to buy an ounce of gold; the higher the value, the cheaper silver is to gold. Since the Federal Reserve cut interest rates, the ratio is running around 90—above the 87 during an easing period from August 2019 to March 2020, and much higher than 59 during the September 2007 to December 2008 financial-crisis easing. The average over the past 50 and 20 years was 63 and 70, respectively, notes Dow Jones Market Data.

Created with Highcharts 9.0.1Relative ValueOver time, the value of gold to silver has varied widely, rising in uncertain periods such​as the pandemic—and today. Gold/Silver RatioSource: Longterm Trends

Created with Highcharts 9.0.12015'20'2560708090100110

As gold moves higher, more retail investors may be drawn to silver, says Chris Mancini, portfolio co-manager of the Gabelli Gold fund. The Bear Trap Report is on board: “We have reduced our gold and gold-miner exposure, but we remain long [silver],” it said on Sept. 12.

Write to Karishma Vanjani at karishma.vanjani@dowjones.com

Next Week

Tuesday 9/23

S&P Global releases both its Manufacturing and Services Purchasing Managers’ Indexes for September. Consensus estimates are for a 51.9 reading for the Manufacturing PMI and 53.9 for the Services PMI. This compares with readings of 53 and 54.5, respectively, in August.

Wednesday 9/24

The Census Bureau reports new-home sales for August. Expectations are for a seasonally adjusted annual rate of 650,000 homes sold, roughly even with the July data.

Thursday 9/25

The National Association of Realtors reports existing-home sales for August. Economists forecast a seasonally adjusted annual rate of 3.95 million homes sold, slightly less than in July. The housing market continues to be in the doldrums, with existing-home sales near 15-year lows.

Friday 9/26

The Bureau of Economic Analysis releases the personal consumption expenditures price index for August. The consensus call is for a 2.7% year-over-year increase, one-tenth of a percentage point more than in July. The core PCE price index is expected to rise 2.9%, matching the July figure.

The Numbers

1.9 M

Workers unemployed for six months or more, some 26% of the jobless population, a post-Covid high.

49.2%

Percentage of consumer spending by the top 10% income bracket in the second quarter, highest back to 1989.

7.5%

Unemployment rate of Black workers in August, from 6.1% a year earlier. One factor: large federal job cuts.

$895

New annual fee on American Express’ Platinum credit card, up from $695. JPMorgan’s top card is $795.

Write to Robert Teitelman at bob.teitelman@dowjones.com