In this episode of the Money Metals Midweek Memo, host Mike Maharrey analyzes the surging gold market, the lagging performance of silver, and the broader economic forces fueling both trends.
From skyrocketing bullion prices to the Federal Reserve’s no-win monetary policy, Maharrey explains why now may be the most opportune time in years to invest in silver, before history repeats itself.
Gold Charges Ahead: Best Performing Asset of 2025
Gold has been on a tear in 2025, continuing the powerful momentum it gained last year. On a particularly wild trading day, the spot price hit the low $3,480s, and gold futures briefly touched a record $3,500 per ounce before mild corrections took place. Year-to-date, the yellow metal is up over 25%, building on a 26.5% rise in 2024, making it the best-performing asset of the year so far.
Supporting the rally is a convergence of forces:
- Central bank gold buying
- Global de-dollarization efforts
- Geopolitical tensions and active wars
- Persistent inflation and fiat currency instability
Maharrey quotes analyst Brien Lundin, who said: “Gold has been telling us it’s not one thing, it’s everything.” In other words, gold is reacting to the system-wide erosion of confidence in fiat currencies.
The Fed’s Monetary Catch-22
The episode highlights the Federal Reserve’s ongoing trap, needing to fight inflation without triggering a recession. Former President Donald Trump reignited the conversation by urging rate cuts, claiming inflation is nearly gone. But Maharrey disagrees, pointing out that money supply growth is back, signaling underlying inflationary pressures that have not been resolved.
The Fed’s dilemma is stark:
- Rates must stay high to tame inflation
- But lowering rates may be needed to avoid recession
- Decades of easy money, especially post-2008 and during COVID, have left no good options
Maharrey calls this a “dead-end street” for the economy, warning that the bust from this monetary cycle is likely still ahead.
Silver Lags Behind — But History Says It Won’t for Long
While gold is smashing records, silver is trailing behind, for now. In 2025, silver is up just over 12%, a respectable gain, but far behind gold. The gold-silver ratio recently hit 104:1, meaning it takes 104 ounces of silver to buy one ounce of gold. That’s well above the historical average of 60:1, and even higher than the 1991 peak.
Historically, such extreme ratios have triggered silver surges. For example, in March 2020, the ratio hit 123:1, and silver doubled in five months. Maharrey argues we’re in a similar setup — a strong gold rally, followed by silver playing catch-up.
Why Silver Remains a Monetary Metal
Even with its industrial applications, silver remains a fundamentally monetary asset. Maharrey illustrates this with a personal story: years ago, he was paid $200 in pre-1965 silver coins. Today, those coins are worth over $4,700 in melt value, revealing just how much fiat currency has depreciated since the 1960s.
Silver still meets several core criteria of money:
- Durability
- Divisibility
- Portability
- Limited Supply
Even though it’s no longer official legal tender, silver is widely accepted in barter and crisis situations — a signal of its enduring monetary role.
Industrial Demand and Price Volatility
Silver is unique because it's both a monetary metal and an industrial commodity. About 60% of global silver demand comes from industries like electronics, solar energy, and green tech. This dual role makes silver more volatile than gold.
According to the Silver Institute:
- 2024 saw a 148.9 million ounce supply deficit
- It marked the fourth consecutive year of deficits
- The cumulative shortfall since 2020 is 678 million ounces, or 10 months of mining output
These persistent deficits, driven by record industrial demand, are forming a bullish foundation for future price gains.
Investment Demand May Soon Join the Party
Ironically, silver’s recent gains have occurred despite weak investor participation. In 2024:
- Investment demand dropped 22%, hitting a five-year low
- In the U.S., silver investment demand fell 46%
- Western markets saw double-digit declines across the board
Most of silver’s strength has come from industrial demand and investment from Asia. Maharrey emphasizes that if Western investors return, the demand spike could send silver soaring.
He also cites Keith Neumeyer, CEO of First Majestic Silver, who believes the Silver Institute is underestimating the supply shortfall and that we may need triple-digit silver prices to restore balance.
The Gold-Silver Ratio: A Signal, Not a Relic
Some skeptics claim the gold-silver ratio no longer matters.
Maharrey strongly disagrees.
He challenges critics to name any fundamental change that would justify its breakdown — and none can. He maintains that the ratio remains a critical indicator of undervaluation.
Analyst Lobo Tiggre explains that if the ratio simply reverts to its average of 60:1, silver would need to rise 70%, or $23 per ounce, putting it above its all-time high. If gold keeps climbing, silver’s upside becomes even more explosive.
Why the ratio still matters:
- Silver’s market is 1/10 the size of gold’s, amplifying price swings
- Silver tends to behave like a leveraged version of gold in bull markets
- Industrial demand boosts prices as economies rebound
In short, extremes in the ratio usually precede sharp reversals, and Maharrey believes we’re on the cusp of another.
Final Thoughts: Opportunity Knocking
Maharrey ends the show with a clear message: silver is on sale.
The combination of:
- Historically high gold-silver ratios
- Long-term supply deficits
- Dormant investment demand
- A strengthening gold bull market
…makes for a compelling case. Investors still sitting on the sidelines may miss their window if silver’s rebound is as rapid as history suggests.
“Smart investing is buy low and sell high,” Maharrey concludes. “And the gold-silver ratio is telling you silver is low.”
For those seeking a store of value and a hedge against monetary instability, silver may be next in line for a breakout.
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