The gold price is still trading above $3,300 per ounce, while silver is holding above $36. Asset manager Sprott believes that both precious metals still have room to grow.
The experts explained this in an interview with Kitco News, also emphasizing that silver currently deserves a little more attention. Currently, the gold-to-silver ratio is below 92, which represents a clear decrease compared to the multi-year highs of over 100 from April of this year.
The fear of a global recession is decreasing, and tensions in trade relations are also declining, it was said. This strengthens the cyclical demand for silver from industry, while gold continues to consolidate. According to Sprott, both gold and silver should continue to rise, as private investors continue to look for investment opportunities to protect their wealth and purchasing power.
More Optimistic about Silver in the Short Term
In the short term, they are also somewhat more optimistic about silver, as the metal still has some catching up to do compared to its big brother gold. Unlike gold, silver is not held as a reserve by central banks worldwide, but it continues to be an important monetary metal for private investors.
Many investors may focus on industrial demand, which currently accounts for around 60% of the market and continues to cause a significant supply deficit, but the important role of the precious metal as a tangible asset should not be forgotten. According to the Sprott experts, the rising national debt is leading to country risks for the economy worldwide. And these risks are increasingly being taken into account, so that investors are avoiding government bonds and turning to alternative monetary assets.
However, since gold has already experienced a strong increase and continues to cost over $3,300 per ounce, investors are beginning to see the value in silver. Therefore, the analysts expect the gold price to continue its rally and pull silver along with it – regardless of whether, for example, industrial demand is influenced by economic activities.
US Debt Rises to more than $37 Trillion
As Sprott warns, US debt is rising to more than $37 billion, and the US Senate has just passed a law that could increase the deficit by another $3 trillion over the next ten years. The law is now being discussed in the House of Representatives.
According to the experts, the gold price could consolidate around the $3,300 mark over the summer, while investors get used to the higher prices. However, the rising debt poses a significant risk to the stock markets.
It is often said that gold is overvalued and in too much demand, but in the view of the Sprott analysts, the yellow metal is not in greater demand than the S&P 500. There are still many investors who could enter the precious metals sector, especially compared to the stock market. And some of these investors would be attracted by the value that can be seen in silver.
