Gold Breaks $3,000, But Here’s Why Silver Could Steal the Show…

Well, you've probably noticed the fireworks in gold and silver this week -- with gold touching $3,000 an ounce and silver pushing up above $34.

Gold had already been performing extremely well over the past 18 months, despite a strong general stock market AND a strong dollar. Now, with the stock market correcting 10% over the past four weeks, it's no longer looking like a one-way street. And new investment flows are moving toward gold in a safe-have trade.

Asia and the Middle East have continued to buy along the way over the past 2-3 years, including central banks. If retail investors in North America and Europe start increasing gold purchases, it would add fuel to the fire. Frankly, we're barely seeing that yet, but it could be coming soon, if for no other reason than fear of missing out, often dubbed as FOMO.

Not only do gold and silver both have momentum but also the fact that the Spring season, especially April, is historically a strong period for these metals. Looking at recent decades, for example, gold closes higher in April most of the time. In fact, over the past five years, gold finished higher in March and April 80% of the time -- and in May, 60% of the time.

Even with all the gains we've been seeing, though, gold is still well below its 1980 high in inflation-adjusted terms. Depending on whether you use the government's understated measure of inflation or the true inflation rate, the 1980 gold high of $850 would be at least $3,500 today.

But the most interesting thing is silver. Silver rallied up to $50 in both 1980 and 2011, and it's been trapped under $35 for over a decade. However, silver has not even overcome its nominal high of $50 of decades past.

But get this – adjusting for inflation (and using the government's deliberately understated CPI numbers), silver's 1980 high is close to $200.

Silver also tends to accelerate and outperform gold in the later part of a bull market (even though it starts out slow). If that pattern follows, and if gold's bull run continues, then we can expect silver to gallop way ahead here soon.

Indeed, silver has already started to outperform gold in 2025, with the gold:silver ratio starting to slide from a historically high 91:1 to start the year, to about 88:1 now. By the time the bull market for precious metals ended in 2011, the gold:silver ratio actually fell into the low 30s.

If that pattern repeats, that implies a dramatic outperformance of silver as compared to gold. So, keep a close eye on silver, particularly if the gold bull has a lot more to run.

As for this week’s market action, before we get to our interview for the week, gold is coming in just a tick below the $3,000 level here at the moment and currently trades at $2,998 an ounce, up 2.6% for the week. The yellow metal is set to end the week in positive territory for the 10th time in the last 11 weeks.

Turning to silver, the white metal is up 3.5% since last Friday’s close, having gained over $1 an ounce. And while it’s come off its highs from earlier in the week where it eclipsed the $34 level, it currently comes in at $33.88 as of this Friday midday recording.

And finally, the PGMs are both having strong weeks as well. Platinum is back over $1,000 to check in at $1,010, good for a 2.6% gain on the week. Palladium, which now trades at a discount to platinum, is up a more modest 1.0% to check in at $996.

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