Silver may be stealing headlines this year, but Goldman Sachs says investors should tread carefully. The white metal has been the standout performer of 2025’s commodities boom, soaring more than 70% year-to-date and touching an all-time high of $51.38 per ounce in early global trading on Monday, according to LSEG data. Gold also broke records, climbing to around $4,060 per ounce after surpassing the $4,000 mark last week a level supported by Federal Reserve rate-cut expectations and renewed safe-haven demand. But according to a new report from Goldman Sachs analysts, the glittering rally in silver may not be built to last. The firm warned that while both metals have benefited from macroeconomic uncertainty and Trump’s escalating trade war with China, silver carries far greater short-term downside risk and volatility than gold.
Both metals jumped sharply after President Donald Trump announced a 100% tariff on imports from China last week, triggering a wave of safe-haven buying as investors fled risk assets. Goldman’s analysts said they expect silver to remain buoyed in the medium term by potential Fed rate cuts, which tend to weaken the dollar and make commodities more attractive. But they cautioned that silver lacks the institutional backing that gives gold its long-term stability. “In the near term, we see significantly more volatility and downside price risk for silver than for gold, which is the only commodity supported by a structural central-bank bid,” the analysts wrote.
Historically, silver and gold prices have moved in tandem, but that link has weakened in recent years. Goldman attributes the divergence to central-bank demand, which has provided a persistent lift to gold. “Silver lacks the institutional and economic profile that supports gold. Silver is not recognized under IMF reserve frameworks, and has no material presence in modern central bank portfolios,” the report said. In other words, gold has become a monetary asset, while silver remains largely an industrial commodity. Silver is widely used in solar panels, electronics, and manufacturing making it more sensitive to economic cycles than to monetary policy. Goldman also dismissed the idea that central banks might pivot to silver as gold prices soar. “Central banks do not manage weight they manage value,” the analysts wrote. “Gold reserves are held passively and are not used operationally.” That means if gold prices rise, central banks simply hold fewer ounces, not cheaper substitutes.
Beyond policy support, gold’s physical traits make it uniquely suited as a reserve asset. It’s ten times scarcer than silver, roughly 80 times more valuable per ounce, and twice as dense meaning it’s far easier to store, transport, and secure. Goldman illustrated the comparison vividly: “A $1 billion holding in gold fits in a suitcase; the same value in silver fills a full-size freight truck.” That practicality explains why gold dominates official reserves and why silver remains absent from central-bank vaults.
Goldman’s analysts noted that silver’s total market size is roughly nine times smaller than gold’s, amplifying every price move. Without a central-bank “anchor” to stabilize flows, even a modest reversal in investor sentiment could trigger an outsized correction. “Even a temporary pullback in investment flows could trigger a disproportionate correction, as it would also unwind the London tightness that drove much of the recent rally,” they wrote. The “tightness” refers to a liquidity squeeze in the London silver market, where inventories have plunged to multi-year lows. With supply tight and demand booming, prices have been turbocharged but Goldman warned that this dynamic could quickly reverse if investors retreat.
In essence, Goldman Sachs sees silver as a leveraged version of gold. It tends to outperform when markets are rushing toward precious metals as a hedge but it also collapses faster when risk appetite returns. “Silver behaves like a turbocharged version of gold,” the report concluded. “When investors pile in, it flies. When they pull back, it crashes.” The takeaway for investors is clear: silver’s upside may be spectacular, but without gold’s structural demand and central-bank support, its downside is even steeper.
