The gold-silver ratio breaks 50! Trump delays tariffs, is the silver price starting to pull back?

Investment Insights - In a tariff-free scenario, silver may face price corrections, with future outlook dependent on geopolitical situations and gold price trends. On January 16, silver prices fell nearly 3%, dropping below $90 per ounce. Yesterday, its price briefly reached a historic high of $93.69 per ounce. On the information front, the Trump administration decided to temporarily refrain from imposing comprehensive tariffs on critical minerals, including silver, opting instead for bilateral negotiations and considering setting price floors, which significantly alleviated market concerns. Additionally, the easing of tensions in Iran, combined with profit-taking by investors, further pressured silver prices. "Early geopolitical and economic uncertainties supported a collective rise in metals, but the tariff suspension gives the market reason to take profits and reassess recent price pressures," said Soojin Kim, an analyst at Mitsubishi UFJ. 【Source: TradingView; Silver and gold price trends over the past three months】 Gold-silver ratio falls below 50, BMO analysts warn of imminent reversal Over the past three months, silver prices have surged over 70%, far exceeding the 9% increase in gold prices. Currently, the gold-silver ratio has fallen below 50, reaching a new low since March 2012. BMO Capital Markets commodity analysts indicate that the gold-silver ratio still has room to decline. However, changes in supply and demand dynamics may suggest that the current trend may not be sustainable. "While geopolitical uncertainties and speculative demand may lead to further declines in the gold-silver ratio in the short term, we forecast that the supply of physical silver will continue to grow, which will inevitably lead to an increase in the gold-silver ratio in the coming years, continuing the long-term trend maintained since the 1970s," BMO Capital Markets stated. $100 silver target price for 2026 still expected Citi previously pointed out that due to the U.S.'s heavy reliance on imported silver, there is a high probability that silver will avoid tariffs. In this scenario, silver prices may face temporary pullback pressure. However, it noted that under the resonance of geopolitical risks and physical shortages, silver still has upward potential. Citi has set a target price of $100 per ounce for silver and $5,000 per ounce for gold. OCBC Bank strategist Christopher Wong also stated that despite short-term adjustments, the medium-term outlook for silver remains clearly positive, supported by factors including supply gaps, industrial consumption, and spillover demand from gold