• Gold hits record $3,500/oz; silver reaches $40/oz high
• Silver outpaces gold with 34% YTD rise, supply deficit cited
• Gold-silver ratio drops to 87 amid silver’s strong rally

Gold’s spot price surged above $3,500 an ounce in early Tuesday trading, surpassing a previous all-time high set last April. Despite a 30% rise since January, the precious metal has been outperformed by silver, which also hit a record high on Monday at $40 an ounce, a level not seen since September 2011.

In a report published on August 26, the Silver Institute noted a 34% increase in the white metal's price year-to-date, compared to gold's 28%. This recent acceleration marks a shift, as Ecofin Agency reported in June that gold was leading with a 30% performance, while silver was at 25%.

The gold to silver ratio, which measures how many ounces of silver are needed to buy one ounce of gold, illustrates silver’s recent gains. After peaking at 105 last April, the ratio fell to 87 in early September, according to English gold dealer Bullion By Post platform.

The price increases for both metals are attributed to broader economic uncertainty, particularly in the United States, where analysts anticipate an interest rate cut by the Federal Reserve this month. However, silver’s recent rally is also fueled by a structural supply deficit.

“Silver is making a move higher in response to expectations of lower U.S. rates, while a tight supply market is helping to maintain an upward bias,” said Tim Waterer, chief market analyst at KCM Trade. The Silver Institute projects a deficit of 149 million ounces in 2025.

While future trends remain uncertain, the outlook for both metals is generally positive. Goldman Sachs forecasts gold to reach $3,675 an ounce by the end of 2025. Earlier this year, Citi projected silver to be at $40 an ounce through 2026, with a potential to hit $46 in a strong rally.

Aurel Sèdjro Houenou