SLV ETF analysis: gold to silver ratio points to more gains

Gold price is in the green for the seven week in a row; hitting a fresh record high on Tuesday at $2,944.63. Its safe haven demand is set to sustain the exceptional performance recorded in 2024. 

At the same time, other metals are also on track for bullish trends. In particular, gold’s less lustrous cousin, silver, is set to continue its uptrend.

The dual-status metal is expected to benefit from increased industrial demand as well as its position as a conventional safe haven asset. As it does, the ultra-popular iShares Silver Trust ETF (SLV) is on path to retest 2024’s highs. 

Since the beginning of 2025, the silver ETF has been in the green for four out six weeks. At its current level of $29.01, it remains above the 25 and 50-day EMAs, indicating some further gains.

The growth of the green economy and heightened safe haven demand are set to bolster silver prices in coming months. Even so, the US-China trade war is curbing gains in the short term.

Silver bulls are looking beyond the US-China trade war

During his presidential campaigns, President Trump threatened to impose tariffs of upto 60% on Chinese goods. A few weeks after his inauguration, he is making true those threats, with the introduced 10% levies already in effect as from 2nd February. 

With China’s retaliatory measures, the market participants are concerned that this tit for tat may prolong. Infact, Trump on Monday announced 25% tariffs on steel and aluminium imports into the US. While the country gets its steel mainly from Canada, Mexico, and Brazil, the tariffs are seen to indirectly target China.

As an industrial metal, silver has an array of uses including electronics. If no deal is reached between the two major economies, businesses may have to forward the resultant costs to the end consumer.

In the near term, the chaos may weaken investor confidence on physical silver demand. Indeed, this is one of the key factors curbing iShares Silver Trust ETF’s price gains. 

However, the bulls are set to gather additional momentum as China focuses on boosting domestic consumption. Besides, the world is keen on attaining the net zero goal of 2050.

According to EV Volumes’ forecast, EVs will make up about 22% of the global light-vehicle sales in 2025. The firm also expects the market share of electronic vehicles to reach 44.6% and 69.5% in 2030 and 2035 respectively.

 It is estimated that a typical EV battery with 200 cells will require about 1kg of silver. With these figures, silver demand is set to surge significantly in 2025 and beyond. 

Gold/silver ratio points to a buying opportunity

The gold/silver ratio measures the number of silver ounces that equals one ounce of gold. Notably, it has held steady above 88:1 since mid-December 2024; an indication that silver is underpriced relative to gold. In fact, as gold price hit a fresh all-time high on Tuesday, the gold/silver ratio rose to a one-year high at 92.10:1

Historically, such a surge occurs during a gold bull run. To close this price gap, silver price will likely record significant gains. Indeed, silver’s fundamentals support this theory with iShares Silver Trust ETF already forming a bullish golden cross pattern. 

Silver price forecast

The daily chart shows that the price of silver has been in a strong bull run in the past few months. It has constantly remained above the ascending trendline that connects the lowest swings since March 2024. 

Silver has moved above the 50-day and 100-day Exponential Moving Averages (EMA). The Relative Strength Index (RSI) and the MACD indicator have moved upwards. It has also moved to the highest swing in May 2024. 

Therefore, silver price will likely continue rising as bulls target the next key resistance level at $34.9, its highest swing in November last year. 

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