KUALA LUMPUR, MALAYSIA -
Media OutReach Newswire - 14 March 2025 - Silver is attracting investor interest, with market analysts predicting a potential
leap to $40 per troy ounce
in 2025. The metal is rising in global investment portfolios, providing
stiff competition to gold's long reign over commodity markets. Kar Yong
Ang, a financial market analyst at Octa Broker, explains why silver has
a very good opportunity to record significant growth this year.
Current Market Conditions and Silver's Performance in 2024
Silver prices
increased by 18%
in 2024, outpacing the more modest increase of gold. The price was
driven by inflationary pressures and stronger industrial demand,
particularly in renewable energy uses. While gold is a classic
safe-haven investment, silver's dual role as
both an investment and industrial metal gives it a unique edge in volatile markets. Yet, risk management is crucial for avoiding unnecessary losses.
There are two major silver market growth drivers:
- - Industrial Demand: Silver's use in renewable energy, particularly solar panels, electronics, and EV manufacturing continues to
expand, distinguishing it from gold, which primarily serves investment and jewellery purposes.
-
- Macroeconomic Trends: While both silver and gold typically
hedge against inflation, silver price drops can be more significant
compared to gold in times of economic uncertainty. For example, during
the COVID-19 crisis, silver
experienced a significant negative return of –20.0%, while gold delivered a positive return of 5.1% in the same period.
Silver Price Forecasts for 2025: Can It Surpass Gold'
Silver is expected to outperform gold in the coming years, whereby
limited supply will be countered by increasing industrial demand. The
price of silver can even reach $40 per ounce sometime in 2025, given the
robust demand. This growth potential creates a nice buying opportunity
for traders. Nevertheless, market liquidity risks, rising interest
rates, and changes in investors' sentiments, among other things, may
affect the market negatively. What's more, the asset is far more
sensitive to economic cycles compared to gold. In case a recession
occurs, silver may drop in price more steeply than gold. Traders should
also monitor the gold-silver ratio. If it's too high, investors may
simultaneously sell gold and buy silver, assuming the ratio returns to
its long-term average.
Those who consider opting for silver instead of gold should closely
analyse both assets and compare their investment risks, nature, and
potential profits. Here's a brief overview of their pros and cons.
- - Liquidity & Market Depth: While gold remains a more
liquid asset, silver's increasing institutional interest is narrowing
this gap, so the difference in liquidity is minor.
-
- Volatility & Risk: While silver experiences greater
price swings than gold, its volatility presents significant
profit-making opportunities for active traders who practice strict risk
management.
-
- Portfolio Diversification: Silver serves as both an inflation hedge and a strategic asset tied to industrial demand.
Traders can tap into the potential of both silver and gold using various
trading platforms. These days, the choice of a platform is not limited
to MT4 and MT5, and other solutions step up their offerings. For
example, Octa broker' proprietary trading ecosystem, OctaTrader, offers
CFDs on silver and gold. OctaTrader reports high trade volume for CFDs
on gold this year despite the slackened interest towards the metal after
Donald Trump's election win. According to the Octa analysts, the demand
for silver on OctaTrader is currently quite high, leading to amplified
liquidity and more profit opportunities.
‘Silver's long-term value is stable because of its underlying
supply-demand dynamics. The metal is widely used in electronics,
renewable energy, and medicine', explains Kar Yong Ang.
‘The Silver Institute
expects
the total silver supply to increase by 3 percent and reach 1.05 ounces,
an 11-year high. The demand is projected to remain at 1.20 billion
ounces this year. Considering this, the demand is likely to outpace even
the increasing supply. Although the demand for jewellery and silverware
is to decline, gains are expected in the consumer electronics market
and industrial fabrication. As a result, the deficit is likely to take
place', he adds.
Silver's strong market momentum, industrial applications, especially for
renewable energy and solar panels in particular, and potential price
appreciation make it an asset to watch in 2025. While volatility remains
a factor, strategic investments in silver may yield higher returns
compared to gold. Traders who aim to deal with the asset should address
it carefully.
Firstly, keep an eye on inflation trends, central bank policies, and
industrial demand to conduct fundamental analysis and identify factors
of potential price swings. To manage risks, balance your portfolio and
do not build an oversized position in any single asset. If your trading
budget is limited, especially after you diversify your investments, you
can access an increased balance through trading instruments like CFDs.
Platforms like Octa broker provide flexible CFD trading options for
silver, allowing traders to capitalise on short-term price movements.
Disclaimer: Trading involves risks and may not be suitable for all
investors. Use your expertise wisely and evaluate all associated risks
before making an investment decision.