Silver’s Next Big Run: Why Retail Traders Are Betting Against Gold

04.09.2025

Saqib Iqbal

5 min read

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Silver’s Next Big Run: Why Retail Traders Are Betting Against Gold

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Analysis reveals shifting capital flows favor silver over traditional safe-haven as stagflation fears mount

As inflation concerns resurface and stagflation looms, retail traders are making a calculated bet: silver, not gold, represents the next major precious metals opportunity. With silver posting 40% year-to-date gains¹ compared to gold’s more modest appreciation, market data suggests a fundamental shift in investor preferences driven by unique structural factors.

The Stagflation Setup

The current economic environment mirrors the 1970s stagflation period¹, when gold surged 2,328% from $35 to over $850 per ounce³. However, today’s landscape presents a critical difference: much higher public debt levels and lower interest rates constrain the Federal Reserve’s traditional anti-inflationary toolkit².

Gold-Silver Ratio: Historical Context

19th Century
15:1

20th Century
45:1

25-Year Avg
66:1

Current
92:1

Higher ratios historically indicate silver undervaluation and potential outperformance

This limited policy flexibility creates a potentially more prolonged inflationary environment, benefiting precious metals with historically low real interest rates.

Table 1: Historical Precious Metals Performance During High Inflation Periods¹

Year	Inflation Rate (CPI)	Gold Price (Avg. $)	Gold-to-Silver Ratio
1970	5.84%	$35.96	20.36:1
1979	13.29%	$307.03	24.38:1
1980	13.58%	$612.56	20.35:1
2022	8.0%	$1,631.00	N/A
2024	2.9%	$2,007.00	88.5:1
2025	2.7%	$3,559.00	92:1

Silver’s Dual Advantage

Unlike gold’s primarily monetary function, silver benefits from robust industrial demand representing over 50% of total consumption⁴. The metal’s superior electrical and thermal conductivity makes it essential for solar panels, electric vehicles, and electronics—sectors experiencing unprecedented growth.

The Silver Institute reports that industrial demand reached a record 680.5 million ounces in 2024⁴, with solar applications alone projected to consume over 20% of annual supply by 2027. This structural demand provides fundamental support that gold, with only 10% industrial applications, lacks.

Table 2: Key Investment Characteristics – Gold vs. Silver⁴

Feature	Gold	Silver
Primary Drivers	Geopolitics, monetary policy	Industrial demand + monetary hedge
Volatility	Lower, stable	2-3x higher than gold
Portfolio Role	Safe-haven anchor	High-beta growth play
Market Liquidity	Highly liquid	Liquid but less than gold
Industrial Demand	~10%	>50%

Retail Positioning Signals

CFTC Commitment of Traders data reveals divergent positioning patterns⁵. While gold’s rally has been absorbed by central bank buying—preventing traditional speculative buy signals—silver has generated multiple contrarian opportunities for retail traders.

Table 3: CFTC Futures Positioning (August 25, 2025)⁵

Category	Gold Futures	Silver Futures
Net Commercials	-90,150 contracts	-173,206 contracts
Buy Signals	Limited due to CB support	Multiple recent signals
Retail Opportunity	Reduced	Enhanced

Silver’s lack of central bank support means speculative selling creates more pronounced dips, generating the “buy the dip” opportunities that attract retail traders’ contrarian strategies⁵.

ETF Flow Momentum

Exchange-traded fund data confirms the shift toward silver⁶. While SPDR Gold Trust (GLD) attracted $2.3 billion in weekly inflows, iShares Silver Trust (SLV) posted its seventh consecutive month of increases, with silver ETFs surging 34% over the past year.

Table 4: ETF Performance Comparison (2024-2025)⁶

Metric	SPDR Gold Trust (GLD)	iShares Silver Trust (SLV)
AUM	$386 billion	Not specified
1-Year Performance	+37.6%	+40% YTD
Recent Flows	$2.3B single week	7th consecutive monthly increase

The Gold-Silver Ratio Signal

The gold-to-silver ratio currently stands at 92:1, well above its 25-year average of 66:1⁸. This elevation historically signals silver’s undervaluation and impending outperformance. The ratio reached a modern high of 125:1 during COVID-19 before silver’s subsequent 150% rally in four months⁸.

2025 YTD Performance Snapshot

40%

Silver YTD

37.6%

Gold YTD

92:1

Gold/Silver Ratio

Table 5: Gold-Silver Ratio Analysis⁸

Period	Average Ratio	Notable Peaks	Current Status
19th Century (Bimetallism)	15:1	N/A	Historically elevated
20th Century	45:1	98:1 (1991, 1939)	Above long-term average
Past 25 Years	66:1	125:1 (2020)	92:1 (July 2025)

Physical Demand Reality Check

Despite soaring prices, physical bullion sales present a contrasting narrative⁷. Royal Canadian Mint reported 43% decreased gold volume and 36% decreased silver volume in 2024, indicating the rally is primarily driven by paper markets rather than physical accumulation.

Table 6: Physical Bullion Sales Data (2023-2024)⁷

Mint	Bullion Type	2023 Volume	2024 Volume	Change
Royal Canadian	Gold	989.1k oz	567.5k oz	-43%
Royal Canadian	Silver	24.4M oz	15.6M oz	-36%
US Mint	Circulating Coins	10,519M	5,871M	-44.1%

Investment Thesis

Three factors position silver for continued outperformance:

Silver Investment Thesis: Three Key Drivers

🌱

Green Economy

Structural demand from solar, EV, and electronics sectors provides growth beyond inflation hedge

📈

Volatility Premium

2-3x higher volatility attracts momentum traders seeking asymmetric returns

💰

Accessibility Factor

Lower per-ounce price makes silver accessible to retail investors with limited capital

Green Economy Tailwind: Structural demand from solar, EV, and electronics sectors provides growth narrative beyond traditional inflation hedge⁴.

Volatility Premium: Silver’s higher volatility attracts momentum traders seeking asymmetric returns during precious metals rallies.

Accessibility Factor: Lower per-ounce price makes silver more accessible to retail investors with limited capital, amplified by perceived undervaluation signals from the gold-silver ratio⁸.

Outlook

The convergence of stagflationary pressures¹,², industrial demand growth⁴, and technical signals from the gold-silver ratio⁸ creates a compelling case for silver’s continued outperformance. Retail traders are positioning accordingly, viewing silver as the vehicle for explosive gains rather than gold’s steady wealth preservation.

Key monitoring factors include Federal Reserve policy responses, green energy transition pace, and gold-silver ratio movements that will determine the trajectory of precious metals markets.