On January 18, silver's year-to-date gain exceeded 27%, with prices reaching $91 per ounce, pushing the gold-silver ratio to around 50, a new low since 2012. BMO warned that this ratio is approaching a historical low, and the current silver market is driven more by speculative activity and a short squeeze, with the risk of a trend reversal accumulating.
BMO points out that while geopolitical uncertainty and "meme-based" trading may continue to drive up silver prices in the short term, in the medium to long term, a physical silver surplus is forming, especially as demand in the solar energy sector may have peaked, and silver's performance may once again lag behind gold.
BiyaPay analysts believe that a gold-silver ratio in an extreme range often indicates an impending asset rotation, and short-term chasing of the rally should be approached with caution to mitigate the risk of amplified volatility. Through BiyaPay, users can use USDT to participate in trading US stocks, Hong Kong stocks, options, and cryptocurrencies, flexibly switching between precious metals and other assets to better cope with potential market reversals.
