Silver Prices is facing strong long-term resistance, and the gold-to-silver ratio is close to its bottom — both signs that prices may soon turn down.
Silver price touched a new high of $51.25 per ounce last week. The price has surged about 73 per cent so far this year, outperforming gold which has risen by 53 per cent (year-to-date).
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In mid-September when silver price was $42 per ounce, in this same space in the bl.portfolio edition of September 14, 2025, we had said that a rise to $50-51 is possible. Indeed, the price rise has happened in line with our expectation but much quicker though.
Silver rates touched a high of $51.25 per ounce last week and closed at $50.15 on Friday.
The recent surge above $40 is just the third instance in history. The previous two instances were in 1980 and 2011 when silver price peaked at $49.45 (January 1980) and $49.8 (April 2011).
In 1980, the price rose as investors chased gold and silver amid concerns of high inflation and geopolitical crisis in the Middle East, while in 2011 it was the hunger for safe havens as even before the global economy was trying to find its feet after the global financial crisis, the Euro Zone debt crisis came into play.
This year, the rally has been fueled by strong inflows into the silver-backed Exchange Traded Products (ETPs), traders piling up long positions, and increased retail demand amid concerns of monetary debasement.
Of course, speculation is an added element in all these instances, and this may explain some of the sudden surge in silver prices then as well as today.
Time for caution
It is now time to be more cautious than being more bullish on silver going forward and investors must resist buying due to FOMO (or the fear of missing out) syndrome.
There is a good chance that the silver price rally could be coming close to a top. Here are some factors to consider when it comes to analyzing the risk versus reward at current levels.
Long-term resistance
A strong resistance is on the monthly chart around $50.50 (candle stick chart) and $53.70 (line chart). This resistance can be obtained by connecting the 1980 and 2011 peaks.
In the previous instances, 1980 and 2011, silver price had tumbled over 50 per cent from its peak. Also, these falls were very sharp and swift. So, if history repeats itself, then silver can now be in danger of seeing a fall to $35-$34 or $32 in the coming months.
Gold/Silver ratio
The Gold/Silver ratio has come down sharply from a high of 107 in April. It is currently at 80.15. A strong long-term support is in the 77.80-77.50 region. A bullish trend reversal from here on can take the ratio up to 96 initially and then to 101 eventually in the coming months.
After the silver prices peaked in 1980 and 2011, the gold/silver ratio rose from 14 (January 1980) to 82 (June 1982) and from around 33 (April 2011) to 84 (June 2016).
This rise in the gold/silver ratio was largely driven by a sharp fall in silver prices at that time. As such, the expected rise to 96 and 101 in the ratio can be caused by a sharp fall in silver prices.
Deja Vu?
The price pattern in silver when tracking the rise from around $17 in 2020 to $51 now looks similar to that of the rally seen between 2006 to 2011. See Chart 3 below. There could be a difference in terms of the time frame between these two upmove, but visually they look similar.
If this pattern sustains and the price turns around, then there can be a sharp fall to about $34-$32.
What does it mean for gold?
Based on the above analysis, assume that the gold/silver ratio falls to 78.50-77.50 from here and silver price goes up to $53.70. Then gold can find peak around $4,185 on average. Similarly, for a fall to $35-$34 or $32 in silver price and a rise to $97 or $102 in the gold/silver ratio, we get an average value of $3,350 for gold.
Source: thehindubusinessline