Happy Thursday, GoldBuzzers!

It's been a fascinating few days watching the metals. Silver has massively outperformed gold over the past 10 days, which is what you want to see in a bull market.

That said, with the Iran ceasefire looking shaky and the Strait of Hormuz still a global flashpoint, none of this is one-way traffic.

In today’s Real Talk, I’ll be looking at what’s behind Silver’s recent move.

Ok. Let’s get into it. ⬇️

Gold slid for a second straight session on Wednesday, dipping to $4,688 as back-to-back inflation reports killed what was left of rate cut expectations. April PPI came in hot, the biggest jump since early 2022, driven by trade costs and energy prices tied to the Iran conflict.

That followed Tuesday's CPI print of 3.8%, the highest since May 2023. Markets have now priced out a US rate cut entirely for this year, per CME FedWatch. India piled on, hiking import tariffs on gold and silver to 15% from 6%. Silver, though, shrugged it all off. The white metal pushed toward $88, its highest since early March, as industrial demand kept buyers interested.

The gold-to-silver ratio has compressed sharply from 62 to around 55 in just a week, a sign silver is gaining relative strength. The AI infrastructure buildout is emerging as a new demand driver alongside solar and electronics. All eyes now shift to the Trump-Xi meeting in Beijing for any signal on the trade truce or the Iran situation, which Trump described as being on "massive life support" after rejecting Tehran's latest peace proposal.

Silver closed Wednesday at $87.80 an ounce. Ten days ago it was $71.31. That's almost a 23% move while gold barely budged - up 3% over the same period.

The gold-silver ratio has compressed from 61 to about 53 in under two weeks. The last time it sat at this level was mid January, right before silver punched through $100 for the first time in history.

Some of the recent coverage is attributing the surge to India. On Wednesday, Delhi raised the import duty on gold and silver from 6% to 15%. The argument runs that Indian buyers front-ran the change and dragged global prices higher.

I don't buy it.

The duty hike was designed to do the opposite. It's a tax meant to crush imports, not stimulate them. Modi went on television Sunday asking Indians to stop buying gold for a year. April imports already hit a near 30-year low after a separate IGST charge spooked the banks into a month-long pause. The new 15% duty makes that worse. Indian domestic prices spiked, yes. But the world's second-largest gold market just got told to stand down. Globally, that's net bearish, not bullish.

The real catalyst sits in China.

On May 10 and 11, the US and China announced a 90-day tariff cut. American tariffs on Chinese goods dropped from 145% to 30%. Chinese tariffs on US goods dropped from 125% to 10%. Silver jumped 6% in a single session. Gold ticked up less than half a percent. That's not a safe-haven move. It's an industrial demand move.

Roughly 60% of annual silver demand is industrial. Solar panels, EV components, semiconductors, AI data centre power systems. Most of that supply chain runs through China. When the tariff wall comes down, every solar manufacturer and chip fab on the mainland gets to plan more production. More production means more silver demand. Gold doesn't get that lift because gold isn't in your iPhone.

The second catalyst is unfolding right now. President Trump arrived in Beijing for a three-day summit with Xi. It's the first US presidential visit to China in nearly nine years. The market is pricing in the chance of a broader deal on rare earths, tariff timelines, and supply chain stability. Silver is the cleanest way to express that bet.

Underneath the headlines, the supply picture is doing its quiet work. The Silver Institute's World Silver Survey, published April 15, projected a 46.3-million-ounce deficit for 2026. Sixth consecutive year of shortfall. Since 2021, the world has drawn 762 million ounces from above-ground stocks to cover the gap. Roughly an entire year of global mine output, gone.

Mine supply can't respond quickly. Around 74% of silver comes out of the ground as a byproduct of copper, lead and zinc operations. The decision to dig more silver isn't really a decision at all. It's a function of base metal prices.

COMEX registered silver inventories have fallen roughly 75% since 2020. London vaults reported a record-low 17% unencumbered last September, which triggered a lease-rate spike in October. The market has been running on thinning reserves for years.

A word on risk. Silver's industrial leverage cuts both ways. If the Beijing summit disappoints or global manufacturing softens, silver corrects faster than gold. The metal lost roughly 35% from its January peak before this latest run. Anyone treating silver as a low-volatility allocation hasn't been paying attention.

The leverage is still there though. If gold pushes toward J.P. Morgan's $5,055 fourth-quarter target and the ratio holds, silver gets to roughly $92. If the ratio compresses to 50, silver clears $100.

What I’ll be watching this week is the Friday summit communique, the next Silver Institute physical liquidity update, and whether the gold-silver ratio holds below 56.

The India headline is loud. China this week is the key.

That’s all for this Thursday, folks. See you on Sunday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com