The precious metals market is ripe for further gains as economic uncertainty and geopolitical turmoil continue to drive demand for safe-haven assets. While gold remains strong, market strategist Michele Schneider is turning her attention toward silver as a potential breakout candidate.
In a recent interview with Kitco News, Schneider, Chief Market Strategist at MarketGauge, shared that she has maintained a neutral stance on gold and silver amid price consolidation. However, she is now watching silver closely, eyeing a buy opportunity if it breaks decisively above $34 an ounce.
Silver has already staged a sharp rally this week, with spot prices climbing more than 4% to $34.39 per ounce—its largest single-day gain since mid-October. Despite this momentum, Schneider advises caution, noting significant resistance around current levels and the need for sustained follow-through buying to confirm the breakout.
Her investment advice this year is clear: “Let the price action dictate the story.” She emphasized, “When buyers buy strength, that’s the start of a bigger move higher. If a breakout above $34 holds, then I think it’s only a matter of time before we see $40.”
Gold also remains robust, recently trading at $3,374.90 per ounce, up over 2.6% on the day. Schneider believes both metals are poised to move higher, with even minor catalysts potentially pushing prices further.
An important signal favoring silver’s potential rally is the recent decline in the gold/silver ratio, which has dropped below its 50-day moving average. This shift hints at a rotation into silver after the ratio reached a five-year high of 107 points last month, coinciding with gold’s record peak near $3,500 an ounce. Schneider draws parallels to 2020, when the ratio plunged from record highs to a six-year low, correcting 51% within a year.
Looking ahead, Schneider expects the Federal Reserve to cut interest rates sooner rather than later, driven by a slowing economy despite persistent inflation. Lower rates would likely boost industrial demand for silver, making it a more effective hedge against inflation compared to gold.
According to the CME FedWatch Tool, markets anticipate a rate cut as early as September. Schneider believes any official signals from the Fed about easing monetary policy could spark renewed interest in both gold and silver.
While favoring silver for its growth potential, Schneider acknowledges gold’s continued importance as a monetary asset, especially as geopolitical uncertainties weigh on the U.S. dollar.
“There is growing sentiment that foreign investors can’t trust the U.S., and that will continue to hurt the U.S. dollar,” she said.
The dollar faces significant downside risk, having broken below an eight-year business cycle and the critical 80-month moving average—moves seen only twice before in 2011 and 2020. The 2011 drop followed the U.S. credit rating downgrade amid mounting national debt.
Despite widespread market fears, the dollar remains weak and is trading near a 3.5-year low. Schneider notes that while the dollar and gold/silver ratio charts are oversold, any rallies are likely to be shallow and brief if the current downward trend persists.
As the greenback falters and geopolitical risks mount, both gold and silver stand to benefit—silver potentially leading the charge if it confirms its breakout above $34.
