Why is silver outperforming gold? What to know before you invest.

Core Insights - Gold and silver prices have reached record highs in December due to economic pressures and geopolitical tensions, with gold at $4,480.60 per ounce (up 71% year-over-year) and silver at $69.38 (up 138% year-to-date) [1][4]. Group 1: Price Movements - Gold prices have increased significantly, reaching a record high of $4,480.60 per ounce, marking a 71% increase over the past year [1]. - Silver has outperformed gold, with prices rising to $69.38, a 138% increase since the beginning of the year [1][4]. - The gold-silver ratio has narrowed from 104 to 1 in April to 64 to 1 currently, indicating a stronger performance of silver relative to gold [4]. Group 2: Investment Dynamics - Experts suggest that rising inflation expectations may lead more investors to buy silver alongside gold, as silver is considered a more affordable option for exposure to precious metals [5]. - The potential for industrial demand for silver, particularly as interest rates decrease, may also drive investment in silver due to its conductive properties [5]. - Silver's dual role as both an investment and an industrial metal contributes to its price volatility compared to gold [7]. Group 3: Investment Strategies - Investors typically view precious metals like gold and silver as a hedge against inflation and economic uncertainty, diversifying portfolios during market volatility [6]. - Various investment methods in precious metals include digital assets like ETFs, futures contracts, and mining stocks, as well as physical assets such as jewelry and coins [7][8].