BOA Loves the Silver

Gold:silver ratio to fall by another 10 points

While investors wait for Fed rate cuts to take a more constructive view on gold, positioning on silver has been more bullish due to its link to green technologies. Again, we see upside for both precious metals in the next 18 months (see Global Metals Weekly), but believe silver should outperform gold because it is more sensitive to manufacturing activity. Headline manufacturing PMIs have historically been a decent indicator for the direction of the gold:silver ratio, and we see a pick up in global industrial production ahead. As such, we expect the ratio to fall by another 10 points to 75 by the end of 2025.