Goldman Sachs Forecasts Gold to Maintain Dominance Over Silver

Goldman Sachs analysts expect gold to continue outperforming silver through 2025 and beyond, citing fundamental shifts in central bank demand patterns that have disrupted the historical correlation between the two precious metals.

In a research note published Monday, Goldman strategists Lina Thomas and Daan Struyven highlighted that the gold-silver price ratio has broken out of its traditional 45-80 trading range since 2022, when Western nations froze Russian reserves following its invasion of Ukraine.

“We don’t expect silver to catch up with the gold rally because higher central bank gold demand has structurally lifted the gold-silver price ratio,” the strategists wrote, pointing to gold’s superior characteristics as a monetary reserve asset.

The bank maintained its bullish outlook on gold with a base case target of $3,700 per troy ounce by year-end 2025 and $4,000 by mid-2026. In a scenario involving a U.S. policy-driven recession, prices could reach $3,880 by December, with extreme cases potentially pushing to $4,500 per ounce.

Physical attributes underpin gold’s advantage, according to Goldman, which noted gold is ten times scarcer than silver, 100 times more valuable per troy ounce, and chemically inert—making it more suitable for large-scale storage and transport by central banks.

“Silver is more volatile and less liquid—characteristics that reduce its usefulness as a reserve asset,” the strategists explained.

While silver initially benefited from China’s solar energy expansion, recent oversupply in solar panel production has diminished this demand driver. Meanwhile, central bank gold purchases have remained robust, with official sector buying reaching record levels in 2023 and maintaining strong momentum through early 2025.

The analysts view current market conditions as “an attractive entry point for long-term gold exposure,” noting light speculative positioning and potential for rebuilding. They acknowledged that a potential Ukraine-Russia peace agreement could trigger a short-term 3% price correction through algorithmic selling but suggested long-term holders would likely view such dips as buying opportunities.