Silver Outperforms Gold as Ratio Plummets; Metals Outlook Strong
Overview
Silver surged 170% in 2025, dramatically outpacing gold's 76% rally and collapsing the gold-silver ratio to 65. This surge was driven by acute physical tightness, robust industrial demand for silver linked to electrification, and gold's continued role as a safe-haven asset amidst geopolitical uncertainty. Copper prices also climbed 40%. Analysts advise maintaining a "buy on dips" strategy for precious metals, viewing them as strategic reserves despite potentially slower gains in 2026.
Silver's Dominance
Silver prices soared 170% in 2025, significantly outstripping gold's 76% advance. This sharp divergence drove the gold-silver ratio down to a low of 65 from 110, signaling a tightening supply chain for precious metals. Periods of acute physical tightness were observed, including rare backwardation in the silver market.
Gold's Strategic Appeal
Gold prices advanced 76% during the same period, driven by sustained safe-haven flows amid geopolitical and policy uncertainty. Analysts note gold's evolution beyond a cyclical hedge into a strategic reserve asset, bolstered by consistent central-bank buying.
Shifting Investor Sands
The performance of precious metals was amplified by unprecedented domestic ETF inflows, with assets under management soaring over 150% in 2025. Positive ETF flows in the latter half of the year indicated renewed investor participation. Currency movements, including a weaker dollar index and a depreciating rupee, further enhanced domestic commodity returns.
Base Metals Momentum
Base metals also experienced strong gains. Copper prices hit nearly $13,000 per tonne, a 40% year-on-year increase. Aluminium gained 17%, and zinc rose 5%. Global refined copper demand is projected to rise by 2.1% to 28.7 million tonnes in 2026.
Future Outlook
Gold and silver are expected to retain their strategic relevance in early 2026, supported by continued demand and limited supply growth. Analysts predict consolidation rather than sharp reversals for precious metals, cautioning that the price ride in 2026 may be less smooth than in 2025. A "buy on dips" stance is recommended.
