Silver's rally is astonishing but hidden risks remain. Can the gold-silver ratio still be chased after hitting a new low?

Silver's strong surge has become the most dazzling precious metals story of 2025. As of December 3rd, silver prices reached a record high of $58.95 per ounce, with a year-to-date increase of 101%, far surpassing gold's 58% rise. Behind this wave of appreciation are dual factors: structural supply tightness and robust investment demand.

**Multiple institutions are optimistic, but forecasts vary**

UBS and Bank of America both hold optimistic views on silver's future. UBS predicts silver will reach $60 per ounce in 2026, while Bank of America is more aggressive, targeting $65 per ounce—emphasizing that silver is currently the most supply-constrained major metal, with structural shortages supporting higher prices. Commerzbank also believes that in a Fed rate-cut environment, silver still has room to rise further, though its forecast is relatively conservative, with a target of $59 per ounce in 2026.

**The key is the decline in the gold-silver ratio—this time really different?**

Behind what seems to be a bullish outlook lies an important warning: the gold-silver ratio has plummeted from the usual 80+ to 72, hitting a new low since August 2021. What does this mean? The relative value of silver compared to gold has significantly rebounded, and the previously severe undervaluation has clearly improved.

In other words, the main driver of silver's independent rally—the valuation discount—is disappearing. Once the gold-silver ratio stabilizes at a low level, the correlation between silver and gold will strengthen, implying that silver's excess upside may have peaked. Going forward, silver's trend will more closely follow gold's rhythm rather than move independently.

**Investors need to shift their mindset**

For those chasing the highs, this is a moment to think carefully. Although institutions are optimistic, the potential for further gains (relative to the already achieved rally) has significantly diminished. Whether silver can continue to hit new highs depends less on supply and more on whether the gold-silver ratio can further decline—but the probability of that is decreasing. Future larger investment opportunities may lie in finding the next undervalued commodity.