SLV, Precious Metals ETFs Surge on Weaker Dollar, Jobs

Precious metals ETFs, led by the iShares Silver Trust (SLV), continued their rise Monday, as Friday's weaker-than-expected U.S. jobs report pressured the dollar and revived speculation that the Federal Reserve may cut interest rates as soon as September.  

The U.S. dollar index slipped after the data, giving a boost to commodity prices across the board, particularly precious metals.

While silver surged, gold has remained relatively rangebound, with the SPDR Gold Shares (GLD) ETF struggling to sustain momentum.  

For more than three months, gold has swung back and forth as investors weigh tariff-related uncertainty, shifting inflation expectations and mixed economic data. GLD, which closely tracks the spot price of gold, reflects that choppiness.

What’s the correlation between precious metals and the U.S. dollar, why has silver has emerged as a standout performer and what does the future hold for silver and gold prices, along with the ETFs that track them?

SLV vs. GLD: Why Silver Outshines Gold in 2025

Silver's recent outperformance compared to gold is being driven by a combination of factors that highlight its dual nature as both a monetary metal and an industrial commodity. While gold has been a strong performer, silver's unique market dynamics have given it an edge in recent months.

Here are some key reasons for silver's stronger performance.

Surging Industrial Demand

A significant portion of silver's demand comes from industrial applications, unlike gold, which is primarily a monetary asset. There's been a surge in demand from high-growth sectors, particularly solar energy, where silver is a critical component in photovoltaic cells.

Other applications in electric vehicles, 5G technology and electronics are also contributing to a persistent supply-demand imbalance. This industrial demand acts as a powerful tailwind for silver prices, especially when the global economy shows signs of resilience or recovery.

The Gold-Silver Ratio

The gold-silver ratio measures how many ounces of silver it takes to buy one ounce of gold. Historically, this ratio has fluctuated, but its long-term average is well below where it has been in recent years. Silver analysts often point out that the ratio is still elevated, suggesting that silver remains undervalued relative to gold.  

As this ratio narrows (meaning silver's price rises faster than gold's), it attracts investors who see it as a "catch-up trade."

Monetary Policy Expectations

Both gold and silver are considered safe-haven assets, but silver's price tends to be more volatile, acting as a "high-beta" version of gold. This means it can outperform gold during periods of bullish sentiment in the precious metals market.  

With markets pricing in potential future interest rate cuts by the Federal Reserve, the opportunity cost of holding non-yielding assets like silver and gold decreases, which traditionally benefits their prices. Silver, with its higher volatility, tends to accelerate faster than gold in these environments.

Technical Breakouts

From a technical analysis standpoint, silver has recently broken through key resistance levels that had capped its price for years.

This technical breakout, combined with strong investor momentum, has signaled to traders that a new, more dynamic phase of the precious metals bull market may be underway, where silver typically shines.

Precious Metals ETFs: Diversification Tools, Not Core Holdings

SLV and GLD continue to play important roles as hedging instruments and tactical diversifiers in a portfolio, particularly in times of macro stress or currency volatility. But they’re not core long-term holdings for most investors given their lack of income and high sensitivity to sentiment.

What Could Go Wrong?

• Fed delays rate cuts, pushing real yields higher, which would be bad for precious metals
• Dollar rebounds on stronger economic data or geopolitical stability
• Energy transition investments slow down, curbing industrial silver demand

In short, while silver has recently taken the lead in the precious metals space, it’s a fast-moving and often volatile asset. For investors using the SLV or GLD ETFs, short- to medium-term opportunities exist, but timing and discipline are key.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in ETFs involves risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions.

At the time of publication, Kent Thune did not hold a position in any of the aforementioned securities.