Insights 
VT 
Silver prices climbed on Monday, with the metal trading at $51.50 per troy ounce, reflecting a 2.89% increase from Friday’s price of $50.05. Since the start of the year, silver prices have soared by 78.23%.
The Gold/Silver ratio on Monday was 79.22, a decrease from 80.29 on Friday. This ratio indicates how many ounces of silver are needed to equal the value of one ounce of gold.
Silver As A Preferred Asset
Silver serves as a historically preferred asset due to its intrinsic value. While less popular than gold, it offers diversification in a portfolio. It is available in physical forms and can be traded via Exchange Traded Funds.
Several factors affect silver’s price, including geopolitical risks and economic downturns, which can raise its value. It typically rises with lower interest rates and fluctuates with the strength of the US Dollar.
Silver is integral in industries like electronics and solar energy because of its electrical conductivity. Demand from major economies, such as the US, China, and India, also affects its prices.
Typically mirroring gold movements, silver benefits from its similar safe-haven status. The Gold/Silver ratio can offer insights into the relative values of these metals.
Strong Momentum And Market Reactions
With silver up over 78% this year, we are seeing strong momentum that traders should watch closely. This surge to $51.50 is not just speculative; it’s heavily supported by stubborn inflation figures that have persisted through 2025, with the last CPI report showing an unexpected rise. Investors are clearly using the metal as a hedge against the eroding value of fiat currency.
The market is also reacting to shifting expectations around monetary policy, which influences silver as a non-yielding asset. After a series of rate hikes through 2024 to combat inflation, recent data showing a slowdown in manufacturing has led us to believe the Federal Reserve may pause or pivot sooner than expected. A weaker U.S. dollar, which has fallen nearly 8% over the past six months against a basket of currencies, is providing a significant tailwind for silver prices.
We must also consider the immense industrial demand that is outstripping supply. Global initiatives for green energy have pushed demand for solar panels, a key use for silver, to record levels, with installations in 2024 having exceeded all forecasts by 30%. Combined with continued growth in the electric vehicle sector, where silver is essential for components, this creates a fundamental supply squeeze that supports higher prices.
The Gold/Silver ratio dropping to 79.22 is a critical indicator of silver’s relative strength, but we see room for it to fall further. Historically, this ratio has averaged closer to 65, suggesting that even after its impressive run, silver may remain undervalued compared to gold. This dynamic could favor strategies that are long silver and short gold.
Given the sharp price increase, implied volatility in silver options has become elevated, making outright long call positions expensive. We think traders should consider call spreads to cheapen the cost of entry and define risk, or look at selling cash-secured puts at key support levels. This allows one to either acquire the metal at a lower price or collect premium if the uptrend continues.
