Silver is attracting investor interest, with market analysts predictinga potential leap to $40 per troy ounce in 2025. The metalis rising in global investment portfolios, providing stiff competition togold's long reign over commodity markets. Kar Yong Ang, a financial marketanalyst at Octa Broker, explains why silver has a very good opportunity torecord significant growth this year.

Current Market Conditions and Silver'sPerformance in 2024

Silver prices increased by 18% in 2024, outpacing the moremodest increase of gold. The price was driven by inflationary pressures andstronger industrial demand, particularly in renewable energy uses. While goldis a classic safe-haven investment, silver's dual role as both an investment and industrial metal givesit a unique edge in volatile markets. Yet, risk management is crucial foravoiding unnecessary losses.

There are two major silver market growth drivers:

● IndustrialDemand: Silver's use in renewable energy, particularly solar panels,electronics, and EV manufacturing continues to expand, distinguishing it from gold, whichprimarily serves investment and jewellery purposes.

● MacroeconomicTrends: While both silver and gold typically hedge against inflation, silverprice drops can be more significant compared to gold in times of economicuncertainty. For example, during the COVID-19 crisis, silver experienced a significant negative return of –20.0%, while gold delivered a positive return of5.1% in the same period.

Silver Price Forecasts for 2025: Can ItSurpass Gold?

Silver isexpected to outperform gold in the coming years, whereby limited supply will becountered by increasing industrial demand. The price of silver can even reach$40 per ounce sometime in 2025, given the robust demand. This growth potentialcreates a nice buying opportunity for traders. Nevertheless, market liquidityrisks, rising interest rates, and changes in investors' sentiments, among otherthings, may affect the market negatively. What's more, the asset is far moresensitive to economic cycles compared to gold. In case a recession occurs,silver may drop in price more steeply than gold. Traders should also monitorthe gold-silver ratio. If it's too high, investors may simultaneously sell goldand buy silver, assuming the ratio returns to its long-term average.

Those who consider opting for silver instead of gold should closelyanalyse both assets and compare their investment risks, nature, and potentialprofits. Here's a brief overview of their pros and cons.

● Liquidity& Market Depth: While gold remains a more liquid asset, silver’sincreasing institutional interest is narrowing this gap, so the difference inliquidity is minor.

● Volatility& Risk: While silver experiences greater price swings than gold, itsvolatility presents significant profit-making opportunities for active traderswho practice strict risk management.

● PortfolioDiversification: Silver serves as both an inflation hedge and astrategic asset tied to industrial demand.

Traderscan tap into the potential of both silver and gold using various tradingplatforms. These days, the choice of a platform is not limited to MT4 and MT5,and other solutions step up their offerings. For example, Octa broker'proprietary trading ecosystem, OctaTrader, offers CFDs on silver and gold.OctaTrader reports high trade volume for CFDs on gold this year despite theslackened interest towards the metal after Donald Trump's election win.According to the Octa analysts, the demand for silver on OctaTrader iscurrently quite high, leading to amplified liquidity and more profitopportunities.

‘Silver's long-term value is stable because of its underlyingsupply-demand dynamics. The metal is widely used in electronics, renewableenergy, and medicine’, explains Kar Yong Ang. ‘The Silver Institute expects the total silver supply to increase by3 percent and reach 1.05 ounces, an 11-year high. The demand is projected toremain at 1.20 billion ounces this year. Considering this, the demand is likelyto outpace even the increasing supply. Although the demand for jewellery andsilverware is to decline, gains are expected in the consumer electronics marketand industrial fabrication. As a result, the deficit is likely to take place’,he adds.

Silver's strong market momentum, industrialapplications, especially for renewable energy and solar panels in particular,and potential price appreciation make it an asset to watch in 2025. Whilevolatility remains a factor, strategic investments in silver may yield higherreturns compared to gold. Traders who aim to deal with the asset should addressit carefully.

Firstly, keep an eye on inflation trends, central bankpolicies, and industrial demand to conduct fundamental analysis and identifyfactors of potential price swings. To manage risks, balance your portfolio anddo not build an oversized position in any single asset. If your trading budgetis limited, especially after you diversify your investments, you can access anincreased balance through trading instruments like CFDs. Platforms like Octabroker provide flexible CFD trading options for silver, allowing traders tocapitalise on short-term price movements.

Tradinginvolves risks and may not be suitable for all investors. Use your expertisewisely and evaluate all associated risks before making an investment decision.

About Octa

Octa is an international broker that has beenproviding online trading services worldwide since 2011. It offerscommission-free access to financial markets and a variety of services used byclients from 180 countries who have opened more than 52 million tradingaccounts. To help its clients reach their investment goals, Octa offers freeeducational webinars, articles, and analytical tools.

The companyis involved in a comprehensive network of charitable and humanitarianinitiatives, including the improvement of educational infrastructure andshort-notice relief projects supporting local communities. Since itsfoundation, Octa has won more than 90 awards, including the 'Most ReliableBroker Global 2024' award from Global Forex Awards and the 'Best Mobile TradingPlatform 2024' award from Global Brand Magazine.