Status: April 17, 2025 by Florian Grummes

With 3,357 US dollars, the gold price reached a new all-time high in Asian trading on Maundy Thursday. Despite the heavily overbought situation and recent almost vertical rises, the spectacular rally shows no end, but has been further exacerbated by the escalating trade war between the USA and China over the last two weeks.

Silver, on the other hand, continues to lag behind the bullish gold price and still shows no real life of its own. Nevertheless, after a sharp drop to 28.33 US dollars, the silver prices recovered quickly and significantly to over 33.11 US dollars in the last nine trading days (!).

Nevertheless, the gold/silver ratio stands at 102.3, reminiscent of the extreme market distortions during the Covid crash in March 2020.

ETF gold holdings, as of April 16, 2025. Source: Holger Zschäpitz

The announcement of drastic US tariffs of up to 245% on Chinese imports massively intensified trade tensions between the two competing superpowers and led to considerable uncertainty and a temporary crash in global financial markets.

The gold price in particular benefited considerably from the exploding risk aversion after a brief but sharp setback to 2,955 US dollars. Within nine (!) trading days, gold prices rose by 13.6% or over 400 US dollars to a new record level.

It’s not just the extremely strong demand from China that’s causing the steep price increase. Western investors are also obviously fleeing to the gold market, as gold ETFs and gold funds are recently recording strong inflows.

In parallel, China’s tightened export restrictions on rare earth elements are fueling fears of a prolonged trade conflict. These raw materials, essential for global supply chains in defense, technology, and manufacturing, underscore China’s strategically achieved monopoly position, while the West neglected investments in these resources.

This dynamic enhances the attractiveness of gold and silver as hedges against trade disruptions, inflation, and market volatility, further supporting the strongly bullish environment for both precious metals not only in the short term but also in the medium term.

Shanghai silver holdings, as of April 14, 2025. Source: Inproved Analytics

While gold is attacking the next important resistance zone at 3,350 USD, the silver price recently did not exceed the 33 US dollar mark. At the same time, physical silver reserves on the Shanghai Stock Exchange have fallen to their lowest level in eight months. Since the beginning of the year, outflows have amounted to around 447 tons. The emptying of silver vaults continues.

Together with the strongly bullish fundamental situation, which is characterized by a persistent supply deficit, rising production costs, and strong industrial demand from China and India, a price development as spectacular as that of gold can be expected for the silver market sooner or later.

The dramatic decline in silver stocks in Shanghai underscores the scarcity and could lead to a price escalation in the event of further supply bottlenecks.

Silver in US Dollars – Daily Chart

Silver in US Dollars, daily chart as of April 17, 2025. Source: Tradingview

From a technical perspective, the silver price is still not gaining momentum. Although there has been a gain of around +11.67% since the beginning of the year, silver investors are rightly somewhat disappointed given the spectacular rally in the gold market.

While the gold price is racing from one all-time high to the next, silver, on the other hand, clearly failed at the end of March at 34.58 US dollars, well below its October high of 34.89 US dollars.

When there was a mini-crash in the stock markets two weeks ago, silver was also hit hard and briefly slipped significantly to 28.31 US dollars.

At least the silver prices have since recovered quickly and in a V-shape. However, all weak hands are likely to have been shaken out with this setback for now. Nevertheless, the 33 US dollar mark has not yet been sustainably recaptured. Instead, the bulls seem to need to catch their breath around the 50-day line (32.52 US dollars) for now.

On the daily chart, the sharp pullback followed by the subsequent recovery has generated a new buy signal on the stochastic oscillator. The upper Bollinger Band currently provides room up to about 35.34 US dollars. As long as the gold price can maintain relatively stable or even continue to march upwards, the silver price should also be able to approach its crucial resistance marks around 33 and 35 US dollars again.

On a broader scale, we continue to expect that the silver price will make its typical sprint towards the finish line by early summer. However, clear evidence is still lacking that the silver bulls will actually take command in the near future.

Silver – Ice-cold shower has cleansed the market

Overall, the silver price has not been able to benefit from the escalating trade war and the spectacular rally in the gold market so far. Instead, the silver bulls had to endure an ice-cold shower two weeks ago. However, this could have freed the silver market from all weak hands.

As the fundamental outlook for the silver market remains extremely bullish due to the persistent supply deficit, rising production costs, and strong industrial demand, it should only be a matter of time before silver can finally develop its own momentum.

The seasonality is favorable for precious metals until mid-May. Silver has the potential to conjure up massive price increases within a few weeks. With prices above 33.10 US dollars (76.4% retracement of the cold shower) and at the very latest with prices above 35 US dollars, the breakout rally should gain momentum and still lead to a fulminant catch-up chase towards about 38 to 40 US dollars or possibly even about 50 US dollars.