Will silver outperform gold in the easing cycle? Institutions provide three main reasons

Amid rising expectations of interest rate cuts in the United States, the precious metals market is ushering in new investment opportunities. According to the latest news, senior market analyst at trading platform XS.com believes that silver may benefit more from U.S. rate cuts compared to gold. What is the logic behind this view? And what does the nearly 148% increase in silver by 2025 indicate?

Why Silver Is More Sensitive Than Gold

According to analysts, silver is more sensitive to changes in monetary policy. This is because silver possesses dual attributes as both a safe-haven asset and an industrial commodity, making its price fluctuations more closely linked to economic cycles and interest rate environments. In contrast, gold, as a pure safe-haven asset, responds more gradually to policy changes.

In a rate-cut environment, low interest rates weaken the appeal of the dollar, thereby pushing up the prices of dollar-denominated precious metals. Since silver is more sensitive to policy changes, it generally has greater upward potential.

Three Major Advantages of Silver

Analysts point out that the attractiveness of silver to investors mainly stems from the following characteristics:

• High liquidity: Silver markets are active, making it easy to buy and sell
• Easier trading: Compared to gold, silver has lower trading thresholds
• Cost advantage: Lower unit prices appeal to both retail and institutional investors

These features make silver an investment asset that combines safe-haven properties with ease of operation.

The Multidimensional Implications of the 148% Increase by 2025

The nearly 148% rise in silver by 2025 far exceeds market expectations, reflecting a reevaluation of silver’s multidimensional value. This increase encompasses three levels of demand:

Demand as a safe-haven asset, demand as a hedge against currency fluctuations, and demand as a key mineral for the U.S. economy. This indicates that investors’ recognition of silver has gone beyond traditional precious metals, viewing it as a more comprehensive asset allocation tool.

Double Benefits of Rate Cuts + U.S. Dollar Depreciation

Looking ahead, as the U.S. interest rate cut cycle potentially unfolds and the dollar depreciates accordingly, silver may experience a new wave of upward momentum. Dollar depreciation will directly enhance the appeal of dollar-priced silver to non-U.S. buyers, thereby driving global demand growth.

From this perspective, rate cuts not only directly benefit silver but also indirectly expand its demand base through dollar depreciation.

Summary

Compared to gold, silver’s advantages in a rate-cut cycle mainly lie in three aspects: greater sensitivity to monetary policy, better tradability, and multidimensional investment value. The 148% increase by 2025 has already validated market recognition of these advantages. Under the dual influence of expectations of rate cuts and dollar depreciation, silver may continue to attract the attention of institutional and retail investors. However, specific investment decisions should also consider individual risk tolerance.