Can Silver Reach $35 In 2024?

The month of May has been extremely successful for silver bulls. Silver started the month near the $26.00 level and reached multi-year highs above the $32.00 level. Can silver go even higher?

Let’s take a look at the key catalyst for silver’s recent rally, the dynamics of gold/silver ratio. Back at the end of April,  gold/silver ratio settled near the 87 level. Recently, gold/silver ratio made an attempt to settle below 73. This move had a major impact on silver markets and served as the key positive catalyst for silver.

When gold/silver ratio began to move lower, speculative traders turned their eyes to silver and initiated long positions. These traders were willing to capitalize on rising demand for precious metals and bet that gold/silver ratio would decline.

The real-life scenario was more bullish than most analysts expected. Back in early April, I wrote  that gold/silver ratio could head towards the 78 level, pushing silver towards $30.00.

The recent move in gold/silver ratio was extremely strong, which provided significant support to silver markets. However, gold/silver ratio has already started to rebound, which is not surprising as speculative traders have started to take their profits off the table.

To move higher, silver would need additional support from gold markets. Meanwhile, gold has recently started to move away from historic highs on profit-taking. Perhaps, central banks have temporarily reduced their purchases to buy gold at more attractive prices later. We will see if this theory is true when second-quarter gold market reports would be released.

Taking a look at the $35 target, it is achievable with gold at $2450 (the recent highs) and gold/silver ratio at 70 (close to recent lows). However, both the gold price target and the gold/silver ratio target do not look realistic in the upcoming weeks as precious metals markets may enter into a correction phase.

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