Gold rising and falling triggers doubts about its peak, silver may welcome a rally.

Despite gold prices breaking through $3,500 per ounce earlier this week, gold futures saw a significant drop on Friday, leading some analysts to question whether the upward trend of gold has peaked. Last week, ABN Amro Bank raised its 2025 gold price prediction to $3,500 per ounce. Ole Hansen, the bank's head of commodities strategy, stated that the rapid rise in gold prices has already reached his recently adjusted forecast target earlier than expected, "but this is increasingly raising doubts in the market about whether gold prices can continue to rise - at least, gold prices need to experience a new period of consolidation." Daniel Ghali, a commodities strategist at TD Securities, stated, "The evident easing of trade tensions is having a negative impact on gold prices, but we have yet to see large-scale capital outflows." "However, we know that investors have continued to buy on dips over the past few trading days, so we believe gold may recover its upward trend." The World Gold Council said that strong ETF demand will continue to support gold, with gold ETF inflows reaching $21 billion in the first quarter, the highest level since the pandemic began. At the same time, for investors who have missed the recent surge in gold prices, silver may be an attractive option. Compared to gold, silver has more industrial uses and is therefore more sensitive to the economy. However, historical data shows that the price of silver often lags behind that of gold. Over the past year, the price of silver has risen by 21%, only about half of the increase in the price of gold over the same period. The ratio of gold to silver prices (i.e. "gold-silver ratio") reached 100 earlier this week, then fell to over 90, while the average level over the past 30 years has been 68. The only other time the "gold-silver ratio" was so imbalanced was at the beginning of the pandemic, when the ratio reached 113, silver prices then rose by 73% in the following 12 months, while gold prices only rose by 8%. ABN Amro Bank stated that, given silver's industrial exposure and current concerns about an economic recession, silver's performance may not surpass gold as significantly as previously predicted. The bank expects silver to eventually rise to $40 per ounce (silver futures are currently around $33 per ounce). JPMorgan also believes that weak industrial demand will put pressure on silver in the short term, but they expect silver to rise to $39 per ounce by the second half of 2025, with an average price of $43 per ounce in 2026.