Analyst predicts that silver will outperform gold in the coming years

Investing.com - Gold and silver prices rose on Wednesday as investors weighed ongoing geopolitical tensions and monitored the release of the Federal Reserve’s January meeting minutes.

As of 10:04 a.m. Eastern Time (11:04 p.m. Beijing Time), spot gold increased by 2.6% to $5,005.44 per ounce, rebounding from Tuesday’s low of $4,841.74. Meanwhile, April-delivered gold futures rose by 2.2% to $5,013.70.

Explore top analyst forecasts for gold and silver prices with InvestingPro.

Geopolitical developments remain a focus. The first round of peace talks in Geneva between Ukraine and Russia, mediated by the U.S., concluded after about two hours. President Zelensky described the discussions as “difficult,” accusing Moscow of delaying progress.

At the same time, Iran announced it had reached a set of “guiding principles” with Washington to resume nuclear negotiations, but its foreign minister hinted that a comprehensive agreement still requires time. Analysts suggest that diplomatic progress could weaken demand for safe-haven assets like gold and silver.

Traditionally viewed as hedges during uncertain times, gold surged to a record high of $5,594.82 on January 29 due to heavy speculative buying. This non-interest-bearing metal often performs well in low-interest-rate environments. In recent months, investment demand for gold ETFs in China and across Asia has become a key driver of price trends.

However, this rally sharply reversed after Kevin Waugh was nominated earlier this month as the next Federal Reserve Chair. Gold prices earlier this month fell to a low of $4,403.24 per ounce before stabilizing.

In other precious metals markets, spot silver jumped about 6% on Wednesday to $77.97 per ounce, after dropping more than 4% in the previous trading day.

Following recent developments, Investing.com interviewed Rick Kanda, Managing Director of The Gold Bullion Company, a UK-based trader, to get his views on recent gold and silver price performance and outlook for the remainder of the year.

1) How significant is the risk of a deeper correction in gold if ETF demand from Asia reverses? Would a price correction itself trigger a wave of selling that could amplify the downside?

“Recently, ETF investment demand from Asia has become a key driver of gold prices, so if this demand slows down, gold will be highly exposed to risk. BCA Research has actually warned that a reversal could trigger a ‘meaningful correction.’ Since Asian market investors are very momentum-driven and sensitive to changes, a price correction could spark a wave of selling, leading to a short-term decline in gold prices.”

2) How strong is central bank buying currently? If investment demand weakens, is that enough to limit the downside?

“Central bank demand remains strong. In fact, China’s central bank increased its gold reserves for the fifteenth consecutive month last month. Central banks tend to buy from a long-term perspective; they are not concerned with short-term profits when purchasing gold, so compared to ETF investors, their reaction to price fluctuations is smaller.”

3) Do you expect silver to outperform or underperform gold in the coming years? What factors will drive this relative performance?

“Considering the momentum for silver into 2026, I expect silver to outperform gold in the next few years. That doesn’t mean I think gold will perform poorly; I believe both metals will rise due to favorable economic conditions. However, silver will see a larger increase, supported also by industrial demand.”

4) Where do you see gold and silver prices by the end of the year?

"Looking back at 2025, silver rose 130% over the year, with ups and downs. Many predict silver will reach about $80 per ounce by the end of 2026, but since it’s already at $78.50, I believe it will surpass that forecast significantly. Based on the gold-silver ratio compression, Bank of America projects silver prices between $135 and $309 in 2026. I agree that by year-end, silver could reach record highs, mainly driven by industrial demand.

Analyzing 2025, gold also experienced a historic surge of 64%, mainly driven by escalating trade tensions, geopolitical uncertainties, and shifts in global reserve strategies. If central banks continue active purchases, I expect the metal to reach around $6,000 per ounce by the end of 2026."

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