Is Silver a Sleeping Giant?

Silver - silver bars stacked

It has been a while since I have written about silver because there has been little to report. In my December 12, 2023, Barchart article on silver, I highlighted why 2024 could be a “silver bonanza.”

The active month COMEX silver futures contract was trading at $23.04 on December 12. In early March 2024, the price was slightly lower. I remain bullish on silver’s prospects, but the price action has been nothing short of comatose. 

A marginal 2023 gain

While nearby COMEX gold futures gained 13.45% in 2023, silver futures only managed a 0.19% rise. The continuous contract gold futures closed last year at $2,071.80 on December 29, 2023, and were 0.73% higher at the $2,086.90 level on March 1. Silver futures closed last year at $23.583 per ounce and were1.84% lower on March 1 at $23.15 per ounce. 

Silver underperformed gold in 2023 and lags the leading precious metal in 2024. 

The silver-gold ratio provides few clues

In the December 12, 2023, Barchart article, the silver-gold ratio was just below 87:1.

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On March 1, 2024, the ratio ({GCJ24}/{SIK24}) edged higher to just above 90 ounces of silver value in each ounce of gold value. Silver’s underperformance compared to gold pushed the ratio marginally higher and remained above the average since the 1970s. While the ratio has edged higher, it provides no clues as to the path of least resistance of silver prices, which remain in a tight trading range.

The range narrows

Silver’s trading range has narrowed over the past years:

  • 2020- $11.735 to $29.53 = $17.795
  • 2021- $21.459 to $30.16= $8.701
  • 2022- $17.32 to $27.32= $10.00
  • 2023- $19.83 to $26.20= $6.37
  • 2024- $21.925 to $24.07= $2.145

While the silver market’s price range in 2024 only incorporates two months of data, the range is one-third of 2023’s trading band and even less compared to 2020 through 2022. Silver’s narrowing range is a price consolidation that will eventually resolve to the up or downside. Given gold’s performance and the price above the $2,000 per ounce level, the odds favor an upside break. Technical resistance in the silver market has dropped to around the $26 per ounce level.  

The factors that could ignite silver

Silver has historically been a highly volatile precious metal that attracts trend-following and speculative activity when significant trends develop. Many market participants have remained on the sidelines because of the inactivity. However, a break higher or lower could cause a herd of buyers or sellers to enter the silver arena. The factors that could push silver prices higher over the coming months include:

  • Gold’s continuing bull market has been in place since the 1999 $252.50 low. At $2,095.70 on March 1, April gold futures were 8.3 times higher. May silver at $23.364 was times 5.8 higher than the 2001 $4.026 low. Therefore, silver could catch up if gold continues to make new record highs. 
  • The potential of a BRICS currency with gold backing and continuing central bank gold purchases is bullish for silver, reflecting a decline in the U.S. dollar’s value and role as the world’s reserve currency. A weakening dollar in the global financial system supports higher silver prices. 
  • Aside from its financial role, industrial demand for silver is rising. The Silver Institute projects industrial demand to increase by 8% to a record 632 million ounces. 
  • Silver’s tight trading range in the current environment suggests a significant move when the price moves above or below technical resistance or support levels. 


Markets reflect the economic and geopolitical landscapes that remain bullish for precious metals, and silver is no exception. 

Miners have lagged- Will they catch up?

Silver’s tight trading range and increasing financing costs have weighed on silver mining companies over the past years. The GX Silver Miners ETF product (SIL) and the ETFMG Prime Junior Silver Miners ETF product (SILJ) are diversified silver mining ETFs that own shares of the leading senior and junior silver mining companies. The miners have underperformed silver futures, which rose only 0.19% in 2023 and were 5.4% lower in 2024 as of March 1. 

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As the chart shows, SIL rose only 0.007% in 2023 and was 16.25% lower over the first two months of 2024. 

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SILJ was 5.2% lower in 2023 and has declined 17% in 2024 as of March 1. The mining shares likely need a significant silver rally to attract the buying, which will lift their share prices. The underperformance could be an opportunity for patient buyers with a long-term bullish outlook for silver prices. 

Silver is an undervalued asset based on gold’s price performance. If gold continues to rally and silver can break above technical resistance at the $26 per ounce level, the buying herd could push metal and mining share prices substantially higher. Meanwhile, as the trading range narrows, silver’s potential means the precious metal could be a sleeping giant at the current price level. 

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On the date of publication, Andrew Hecht did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.