Silver may outshine gold as investment demand rises
2025-09-01 17:14:37
Gold and silver have broken out again. While gold continues to garner most of the market's attention, silver may be more in the spotlight.
Market focus shifts: Silver's rally may outshine gold's
Spot gold closed at an all-time high last week, breaking through $3,440 per ounce, while spot silver broke through the $40 mark on Monday (September 1) , and was last traded at $40.67 per ounce, with a daily increase of more than 2.5% and a weekly increase of more than 2%, setting the highest weekly closing price since August 2011.
Harvard University's endowment fund's massive investment in the world's largest gold ETF, SPDR Gold Shares (NYSE: GLD), has fundamentally altered the landscape of gold demand. However, significant precious metals investments in the second quarter were not limited to this one. Saudi Arabia's central bank's 13F filing shows it invested $30.5 million in the iShares Silver Trust (NYSE: SLV) and nearly $10 million in the Global X Silver Miners ETF (NYSE: SIL).
This is undoubtedly a significant positive for the silver market, but a key point needs to be noted: this move is not a central bank allocation to ETFs to monetize silver. The Saudi Arabian Central Bank also manages the country's sovereign wealth fund, and some analysts believe the investment is more likely for wealth management purposes.
Although Saudi Arabia's investment in silver is insignificant compared to its technology sector positions, more and more analysts point out that this highlights the investment value of silver - its positioning has gone beyond the simple industrial growth game.
Analysts emphasize that silver's appeal stems from its valuation advantage over gold . Although the gold-silver ratio has fallen sharply from its April high, it is still at a high of over 86, well above the historical average range of 50-60.
Silver has historically faced a disadvantage due to a lack of institutional interest. When funds seek safe-haven assets, their traditional first choice is gold, the monetary metal favored by central banks. The challenge for the silver market is that it is only about half the size of the gold market, resulting in far greater volatility. Silver investment has traditionally been driven by retail investors, who often struggle to afford gold prices of $3,500 per ounce.
Now that sovereign wealth funds recognize the value of silver, it may completely change the investment landscape of this precious metal.
Technical Analysis
Spot silver saw strong follow-up buying momentum for the third consecutive trading day.
From a technical perspective, silver prices closed above the $39.00 mark last week and subsequently broke through the multi-year high of $39.50 and the psychological level of $40.00, which was seen as a new catalyst for the bull market. Positive oscillators on the daily chart further boosted the upward momentum.
The daily Relative Strength Index (RSI) is currently approaching overbought territory. In this context, it would be prudent to wait for some consolidation or a moderate correction in silver prices before considering initiating new long positions and positioning for subsequent appreciation.
On the downside, any technical pullback is likely to attract bargain hunting around the $40.00 mark. The $39.50 area will constitute important near-term support. If it is effectively broken below this level, it may trigger a technical sell-off and open up space for a deeper pullback.
On the upside, the high of $40.50-40.55 will constitute immediate resistance. After breaking through this level, the bulls will target the round mark of $41.00. If the upward trend continues, silver prices may further test the next important resistance level in front of the $41.50 mark.
(Spot silver daily chart, source: Yihuitong)
At 17:04 Beijing time, spot silver was trading at $40.66 per ounce.
Market focus shifts: Silver's rally may outshine gold's
Spot gold closed at an all-time high last week, breaking through $3,440 per ounce, while spot silver broke through the $40 mark on Monday (September 1) , and was last traded at $40.67 per ounce, with a daily increase of more than 2.5% and a weekly increase of more than 2%, setting the highest weekly closing price since August 2011.
Harvard University's endowment fund's massive investment in the world's largest gold ETF, SPDR Gold Shares (NYSE: GLD), has fundamentally altered the landscape of gold demand. However, significant precious metals investments in the second quarter were not limited to this one. Saudi Arabia's central bank's 13F filing shows it invested $30.5 million in the iShares Silver Trust (NYSE: SLV) and nearly $10 million in the Global X Silver Miners ETF (NYSE: SIL).
This is undoubtedly a significant positive for the silver market, but a key point needs to be noted: this move is not a central bank allocation to ETFs to monetize silver. The Saudi Arabian Central Bank also manages the country's sovereign wealth fund, and some analysts believe the investment is more likely for wealth management purposes.
Although Saudi Arabia's investment in silver is insignificant compared to its technology sector positions, more and more analysts point out that this highlights the investment value of silver - its positioning has gone beyond the simple industrial growth game.
Analysts emphasize that silver's appeal stems from its valuation advantage over gold . Although the gold-silver ratio has fallen sharply from its April high, it is still at a high of over 86, well above the historical average range of 50-60.
Silver has historically faced a disadvantage due to a lack of institutional interest. When funds seek safe-haven assets, their traditional first choice is gold, the monetary metal favored by central banks. The challenge for the silver market is that it is only about half the size of the gold market, resulting in far greater volatility. Silver investment has traditionally been driven by retail investors, who often struggle to afford gold prices of $3,500 per ounce.
Now that sovereign wealth funds recognize the value of silver, it may completely change the investment landscape of this precious metal.
Technical Analysis
Spot silver saw strong follow-up buying momentum for the third consecutive trading day.
From a technical perspective, silver prices closed above the $39.00 mark last week and subsequently broke through the multi-year high of $39.50 and the psychological level of $40.00, which was seen as a new catalyst for the bull market. Positive oscillators on the daily chart further boosted the upward momentum.
The daily Relative Strength Index (RSI) is currently approaching overbought territory. In this context, it would be prudent to wait for some consolidation or a moderate correction in silver prices before considering initiating new long positions and positioning for subsequent appreciation.
On the downside, any technical pullback is likely to attract bargain hunting around the $40.00 mark. The $39.50 area will constitute important near-term support. If it is effectively broken below this level, it may trigger a technical sell-off and open up space for a deeper pullback.
On the upside, the high of $40.50-40.55 will constitute immediate resistance. After breaking through this level, the bulls will target the round mark of $41.00. If the upward trend continues, silver prices may further test the next important resistance level in front of the $41.50 mark.
(Spot silver daily chart, source: Yihuitong)
At 17:04 Beijing time, spot silver was trading at $40.66 per ounce.
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