Why I’m Watching Silver Like a Hawk and Gold Like a Central Banker

If you’ve felt like markets lately have been writing a soap opera with one too many plot twists, you’re not alone. 2025 feels like a “transition year” in every sense, markets are jittery, policy is chaotic, and investors are unsure whether to sprint, stroll, or stand still.

But under all the noise, I think the real story is silver, and a very underappreciated regulatory shift called Basel III.

Basel III: The Central Banker’s Quiet Gold Coup

Back in 2019, a little regulation called Basel III was implemented globally to strengthen the financial system after 2008. But in June 2021, a key update changed how gold is treated by banks. Suddenly, allocated physical gold became a Tier 1 asset. Translation: gold held in your vault, not paper gold, is now considered as safe and liquid as cash.

This may not sound dramatic, but for bullion dealers and central banks, it’s as if the referee just changed the rules mid game, and physical gold got promoted to star quarterback. Paper gold (think ETFs and unallocated contracts) didn’t get the same treatment, which means demand for physical has been quietly growing behind the scenes.

In short: Basel III made real gold sexy again. And when gold gets sexy, silver isn’t far behind.

The Gold to Silver Ratio: Flashing Red

Right now, the gold to silver ratio is sitting around 105:1. That means it takes 105 ounces of silver to buy a single ounce of gold. Historically? That’s bizarre.

The recent historical average is about 60:1, and the multi-century average is closer to 15:1. To put that into perspective, with gold at $3,400 per ounce:

• At 60:1, silver would be $57
• At 15:1, silver would be $227

That’s quite a gap from where silver sits today. This ratio has only breached 100 a few times: during the COVID panic, and in the early 1990s when a Gulf War, U.S. recession, and capital flight into gold created a temporary distortion.

Silver is traditionally both a monetary and industrial metal. When fear rules, gold leads. But once the dust settles and the recovery narrative takes hold, silver tends to catch up, fast.

Don’t Panic, Prepare

In my view, we’re entering the final innings of a shakeout, likely headed into a short recession. But after that? I expect a major rally to follow.

As governments globally turn to fiscal stimulus, infrastructure spending, and monetary easing, commodities will benefit, especially gold and silver. Gold may cool off after reaching new highs, but silver is trading like a drunk cousin at a wedding: confused, underpriced, and likely to make a dramatic entrance soon.

A Window That Doesn’t Stay Open

Premiums on physical silver remain unusually low, for now. But we’ve been here before. Demand spikes and suddenly dealers are out of stock, premiums double, and you can’t find a 10 oz bar unless you’re on a first-name basis with a refinery manager.

I don’t believe the days of discounted silver will last much longer. Between Basel III forcing a rethink on physical metal holdings, geopolitical shifts pulling capital back home, and silver’s historically stretched price relationship to gold, this is the time to get exposure.

This isn’t the environment of 10 or 20 years ago. This is a new game. You need to keep some powder dry, yes. But don’t miss the moment to load up when markets wobble. For precious metals, especially silver, that moment might be now.

Courtesy of Neptune Global

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