Silver Breaks $35 Resistance, Outshines Gold

Silver dominated market focus last week with a powerful surge. Launching forcefully on Monday, prices skyrocketed to $36.27/oz by Wednesday—a 13-year high (last seen on February 29, 2012)—peaking at $36.51 on Friday before settling at $36.13. The weekly gain reached +9.4%.

Among 1,275 trading weeks this century, this net weekly gain ranks as Silver’s 21st best (the record being +17.4% during pandemic lockdowns ending March 27, 2020). Year-to-date, Silver is up +23.4%, outpacing Copper (+20.1%) but trailing Gold (+26.2%).

The current Gold/Silver Ratio (GSR) stands at 92.2x, significantly above its 25-year moving average of 69.1x. A reversion to this mean would imply a $48.22 silver price—33% above the current $36.13. Historically, a ratio above 80x typically precedes silver rallies.

Gold edged up only +0.5% last week. A sustained bullish trend requires a decisive break above $3,487, while support holds at the $2,973-$2,844 zone.

Silver Breakout Confirmed

Technical Milestones:

• Silver decisively breached the 13-year resistance at $35/oz on Thursday, confirming a major weekly breakout.
• Silver miner ETF (SIL) hit multi-year closing highs before the metal’s breakout, signaling impending momentum.
• Silver junior miner ETF (SILJ) surged through $14 resistance on heavy volume.
• GSR rapidly retreated to 94x.

Historical Precedents:

1. When GSR hit 124x in 2020, silver soared 140% within months.
2. After last breaking $35, silver rallied to $50 in under 6 weeks.

Capital Rotation in Mining Sector

Investors are shifting from overextended gold miners (GDX/GDXJ doubled in 18 months) to undervalued juniors:

• Canada’s TSX Venture (CDNX, 50% junior resource stocks) broke out from a 3-year accumulation base.
• The index remains 78% below its 2007 all-time high and 40% below 2021 highs.
• A replication of its 2020 rally (330→1,113 in one year) would imply 75% upside from current 640 level.

Fundamental Backdrop：Global silver output has fallen short of consumption for five consecutive years.

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