Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Silver’s impressive year-to-date performance is only heating up with $40 on the horizon, according to IG analysts. The London-based financial services company reads the gray metal’s technical performance as a steady, sustained rise with the structural demand support to reach higher. The widening relative value gap between gold and silver is evidence of this bullish setup. IG sees macroeconomic changes, including rate cuts, inflation, and dollar value, as further boons to silver’s rise.
Rising Demand Interest
Silver serves as an investment and an industrial metal, resulting in two robust sources of consumption. This dual role helps maintain a steady demand floor, which only rises as industrial usage expands into renewable energy production such as solar panels, 5G infrastructure, and electronics. Photovoltaics is the standout sector with purchases expected to eclipse total silver output by 2050.
This steady surge in industrial buying is complemented by a rising tide of investment interest. As IG’s Chief Market Analyst Chris Beauchamp explains, silver is “attracting increased attention from traders and investors alike.”
This revitalized retail demand is fueled by rising gold prices as many investors seek out a lower cost-basis and widespread economic uncertainty caused by upended global markets.
The Widening Value Gap
Gold’s meteoric rally isn’t just pushing its price higher; it’s also widening the gap between gold and silver in relative value. This disparity is reflected in the gold-to-silver ratio, which shows how many ounces of silver are needed to buy one ounce of gold.
Recently, that ratio climbed above 100:1—a level many analysts view as a strong signal that silver remains undervalued by comparison. Historically, silver has tended to rally after gold makes its move, often with a slight delay.
Macroeconomic Influences
IG analysts highlight various macroeconomic factors essential to propelling (or stymying) silver’s onward move:
- Interest Rates – The Federal Reserve’s wavering fiscal stance is a major uncertainty in silver’s future. Any slashes would prove beneficial to the shiny metal as non-yielding assets become more attractive. Wall Street is factoring in three rate cuts this year, although volatile market conditions may force a policy shift.
- Inflation – Inflation has fallen significantly from recent highs, yet remains sticky. A challenging economic climate of trade friction and slow growth could push this crucial metric up. Deloitte predicts inflation will stay “stubbornly high in 2025 at 2.8%.”
- Dollar Strength – Gold tends to move in the opposite direction of the dollar, which makes their simultaneous rise in 2024 unusual. With a national debt burden at $36 trillion and a global push to de-dollarize, the greenback’s prospects look weak. When the dollar turns south, the yellow metal is expected to receive a considerable boost.
Technical Targets
IG’s Chief Market Analyst sets a price target of $40 within the next quarter, representing nearly a 40% surge since the beginning of the year. Beauchamp points to a strong technical resistance around $35, which silver would need to break through to stretch higher. A robust wave of trading volume might push the gray metal over this hurdle, buoying prices to “$38-$40 by mid-2025.” This falls in line with the average silver price predictions among experts for this year, although many suggest the metal is set up for higher gains.