All eyes are on the precious metals market, as gold has hit a fresh all-time high of US$2,232.75. In A$ terms it’s trading at a record of A$3,429.72.

According to Bank of America, China boosted its imports of gold for non-monetary use by 51% to 367 tons during the months of January and February. To put that number into context, the global annual physical gold market is usually around 4,000 tons.

Where gold goes, silver typically follows, so it’s interesting to look at what’s happening in the silver space. The Silver Institute notes that the physical silver market has been in a deficit position for the last two years – with another deficit forecast for 2024. Silver had been lagging gold earlier this year, but in the last month it’s gained by 9.44%, while gold is up 8.55%. Silver is likely to be well supported with expanding solar cell production.

The graphic below courtesy of Macrotrends compares the relative performance of gold (blue line) and silver (orange line) over the past 20 years. There is a nominal value to demonstrate the comparison in actual investment returns between over the time period. One would think that silver has ground to make up.