Silver Is Poised to Outperform Gold in 2025 Due to Trump’s Tariffs
Daniel Ghali, Senior Commodity Strategist at TD Securities, recently said that a key reason to remain bullish on precious metals in 2025 is that the bearish impact of a stronger U.S. dollar on commodities, including gold, is fading.
In the past, the price of gold has had a mostly inverse relationship with the U.S. dollar index and U.S. bond yields. But since 2024, in the environment of a stronger dollar and rising U.S. bond yields, the price of gold has been rising as well, which is very rare to see in the past few decades.
According to Ghali, growing uncertainty about the geopolitical situation is driving demand for investment in the precious metal, while global tensions and economic changes are prompting investors to seek safer assets, a dynamic that shows no signs of abating anytime soon.
In addition, concerns about mounting global debt, particularly in the United States, have prompted investors to turn to precious metals as a hedge against the risk of economic instability.
In this climate, a stronger U.S. dollar has very limited impact on precious metals, so investors are now seeing gold and the U.S. dollar move higher together. And compared to gold, which is at an all-time high, Ghali is more bullish on the outlook for silver, believing it could be the commodity with the most upside potential in 2025.
As a result of Trump’s tariff threats, traders around the world are bringing metals to the U.S. from London and other places to hedge against the risk of tariffs on precious metals.
Ghali noted that London is losing inventory at an alarming rate, while U.S. inventories are starting to rise at an alarming rate. The problem unique to the silver market is that the U.S. happens to be a significant end-user of silver, which happens to be in a structural shortage for at least four consecutive years, and it’s not clear whether the invisible inventories on the ground will ever return to the market at current prices.
To solve this problem, the price of silver would actually have to rise in order to stimulate inventory build-up from unconventional sources. This is a very strong support for the silver price, according to Ghali.
Last month, Ole Hansen, head of commodity strategy at Saxo Bank, also said that he continues to be bullish on the performance of gold and silver in 2025. Hansen sees more potential for silver, which is expected to reach $38 per ounce, up more than 20 per cent from its current level, due to silver’s dual role as both a currency and an industrial metal.
Source: https://nai500.com