The precious metals gold and silver performed convincingly in 2024. An expert at Commerzbank expects further upward potential for silver in particular in the new year.
• Silver remains cheap compared to gold
• Strong industrial demand drives silver prices
• Optimistic price forecast for 2025
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The silver price has increased in value by around 23 percent in 2024. In terms of performance, the industrial metal did not quite match that of its big precious metal brother gold, but Carsten Fritsch, precious metals analyst at Commerzbank, sees the opportunity for further price increases in the new year.
monetary policy is likely to drive silver prices further
Market expert Kitco admits that silver continues to perform worse than gold in a recent investor report. Nevertheless, he remains positive for 2025. The current gold-silver ratio is trading at around 85 points, roughly where it started the year, although prices have risen in 2024, the precious metals analyst says. “In other words, silver is still cheap compared to gold,” emphasizes Fritsch.
The expert sees further upward potential, particularly through monetary policy. “Like gold, silver is supported by the interest rate cuts that have already been implemented and the prospect of further cuts by the central banks. Despite its high industrial use, silver is also an investment metal,” he is quoted by the portal.
The Federal Reserve’s easing cycle is supporting investment demand for gold and has increased the attractiveness of silver as an investment this year, he points out, citing inflows into silver-backed exchange-traded funds (ETFs). Nevertheless, demand for physical gold is currently stagnating at a four-year low.
Demand from industry remains high
In his opinion, silver is particularly benefiting from strong industrial interest. While investment demand has improved in recent months, the mainstay of silver’s support is industrial demand, which continues to “break record after record.” The expert also points out that silver is a raw material in high demand, for example in photovoltaic solar modules. “Silver demand for photovoltaics has more than doubled in the last three years and is now almost equal to demand for bars and coins,” he said.
Prospects for 2025 remain good
A further supply deficit is expected for silver in 2025, which will have a positive effect on the price forecast in the long term. “We expect prices to rise to $32 per troy ounce by the middle of next year and to $33 by the end of 2025,” he said. As a result, silver will also make up some ground against gold and the gold/silver ratio will fall to 80 by the end of 2025, the expert continued.
Editorial team finanzen.net
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