Monarch PMS uses a 60x ratio as the benchmark in its valuation model. The current level therefore suggests that silver has underperformed gold after giving back much of its earlier outperformance.

This relative movement is important because the gold-silver ratio is often used to compare the valuation and performance of the two precious metals. In Monarch’s framework, the higher ratio makes silver look relatively cheaper than gold.

What to expect for gold and silver

Monarch’s base case, which carries a 55% probability, sees gold trading between $4,300 and $4,700 an ounce by the end of 2026. Silver is projected at $70-$85 an ounce under the same scenario.

The base case assumes the US Federal Reserve holds rates through September, energy prices normalise, real yields plateau and central banks continue purchasing around 250 tonnes of gold per quarter.

The firm’s valuation model provides another indication of the relative attractiveness of the two metals. It places gold’s modelled value between $3,248 and $4,595 an ounce, with a midpoint of $3,922. For silver, the modelled range is $54-$77 an ounce, with a midpoint of $65.

Gold’s June low of $3,985 was therefore within roughly 2% of Monarch’s modelled midpoint. Silver, at $61.70, remained below its $65 midpoint, reinforcing the firm’s view that silver looks cheaper relative to gold.

Silver has a supply advantage

The case for silver is not based solely on the ratio. Monarch also points to tightening physical-market fundamentals.

The firm expects a sixth consecutive annual silver deficit, while around 762 million ounces have been drawn from above-ground stocks since 2021. At the same time, mine supply has remained broadly flat for about a decade.

Monarch also highlights the gap between paper claims and available physical metal. Paper claims on COMEX are roughly 5.6 times registered physical inventory, which could amplify upside price moves if physical demand strengthens.

Fed policy remains the key risk

The outlook, however, is not one-way. Monarch assigns a 20% probability to its bear case, under which gold falls to $3,400-$3,900 and silver to $45-$55 an ounce if the Fed raises rates in September, oil prices decline further and weaker demand turns disinflation into a broader economic slowdown.

Its bull case, carrying a 25% probability, sees gold at $5,000-$5,600 and silver at $95-$120 if labour-market weakness pushes the Fed towards easing, real yields fall, institutional allocation to precious metals resumes and physical tightness in silver returns.

For now, Monarch’s valuation framework suggests that while gold remains the more established safe-haven asset, silver offers greater relative value heading into the final months of 2026, particularly if its supply deficit and physical tightness begin to exert greater influence on prices.