(Reuters) -Gold will continue to outperform silver, Goldman Sachs said in a note on Monday, citing strong central bank demand for bullion as a factor that has structurally elevated the gold-silver price ratio.
As a result, the bank does not expect silver to catch up with the ongoing gold rally.
The gold-silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, currently stands at around 102, versus about 84.7 a year ago.
“With Chinese solar production now slowing amid oversupply, high recession risk, and central bank gold buying remaining strong in 2025, we expect gold to continue out-glittering silver,” the bank said.
However, it added that, given the strong correlation in flows, renewed demand for gold in 2025 was likely to boost silver prices too.
Spot gold has gained over 26% so far this year, and hit a record high of $3,500.05 an ounce in April, also aided by geopolitical uncertainty and increased flows into gold-backed exchange-traded funds. Silver prices are currently trading at $32.4 per ounce, up 12% so far in 2025. [GOL/]
Goldman reiterated its structural bullish gold view with a base case price of $3,700 an ounce by year-end and $4,000 by mid-2026.
It added that, in the event of a recession, the acceleration in ETF inflows could drive the gold price to $3,880 by year-end.
Furthermore, it said that in extreme risk scenarios – such as heightened concerns over Federal Reserve independence or shifts in U.S. reserve policy – gold could plausibly reach $4,500 by the end of 2025.
The focus is on Fed Chair Jerome Powell for clues on the interest rate path during his press conference following the end of a two-day policy meeting on Wednesday.
Despite past tensions and remarks suggesting the possibility of removing Powell, U.S. President Donald Trump said on Sunday he had no intention of firing the Fed chief, whose term ends in about a year.
(Reporting by Ashitha Shivaprasad and Brijesh Patel in Bengaluru. Editing by Kirsten Donovan and Mark Potter)
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