Of the main precious metals, silver has been lagging this year. It is down by around 3.8% since the January open, while its sibling precious metal gold, is up around 1.4%. These figures compare with the S&P 500 which, at the time of writing, is down by 1.2% year to date.

The gold price saw a recent surge to an intra-day high of near $1,365 which is very close to what analysts see as a break-out point from its recent trading range, before it was brought back down to earth, but seemed to be seeing some strength again as the weekend approached. We do see gold as moving higher this year and stick to our target assumption of it reaching perhaps $1,450 before the year end and if we are right in our analysis then silver should also benefit.

The Gold:Silver Ratio (GSR) beloved of precious metals followers also points to a higher silver price as it is currently at around 81 and its recent range over the past couple of years has been from around 65 to 82 (the lower the index, the higher the price of silver vis-à-vis gold.) Followers see this as a sign that silver is due for a re-set, and the downside risk looks to be relatively small. Should gold indeed move higher, as we anticipate given alternative investment classes like general equities and bitcoin are looking vulnerable, and the GSR come down a few points, a move into silver could be a decidedly profitable one.

In addition though some major silver analysts also see the stars aligned for the metal. Ted Butler, who follows the vagaries in the silver market closer than anyone and rails against JP Morgan’s effective control of the silver futures market, while building an enormous silver inventory on its own account, sees the next upwards move in the metal as being the big one. He has been predicting this for some time now, but the logic becomes stronger with time and he will be right sooner or later!

The Silver Institute points to declining new mined silver metal production which it reckons will drop again by around 2% this year. It also foresees rising industrial usage – solar panel demand has been jumping enormously and silver is utilized in many aspects of new technology. The Institute was also counting on rising investor demand this year, although this doesn’t seem to have come about yet judging by poor U.S. Mint silver coin sales.

The GSR though is still riding at a level where analysts who follow it feel silver is a definite buy in preference to gold. The late, great, Ian McAvity always used to reckon if the GSR is over 80, buy silver, but if it falls below 40 buy gold). This may well have been excellent advice, but on more recent trading patterns we’d probably put the level for returning to buying gold at 60, or even a little above.

The last time the GSR was below 40 was seven years ago in April 2011 when the silver price spiked very briefly to near $50, and over the past five years it has mostly ranged from the mid 50s to around 85, but spent most of its time between 60 and 75. The out and out silver bulls look to the GSR coming back to what they claim is its historic level of around 16, but we feel this is totally unrealistic. The last time this happened was when the Hunt Brothers tried, and almost succeeded, to corner the silver market back at the beginning of 1980.

But overall followers of precious metals will be well aware that the silver price tends to follow that of gold, doing rather better in percentage terms when the gold price is rising and vice versa. We do think the gold price will indeed rise, buoyed up by geopolitical issues which appear to be deteriorating, with the likelihood of some kind of militaristic conflict between the U.S. and Russia developing getting stronger by the day. North Korean problems appear to have diminished for the moment, but could flare up again at short notice, while trade disagreements between China and the U.S. are likely to continue and could escalate.

But these are not the only areas of potential disagreement between the major powers. What Russia sees as NATO military encroachment towards its borders in Europe could be another potential area of serious political disagreement, or even military conflict, as could the U.S.’s seeming determination of maintaining a presence in disputed areas of the South China Sea which China views as its own territory.

In the light of geopolitical uncertainty it will be particularly interesting to see how the markets view the latest allied missile strikes on Syria when the markets open on Monday, and whether there is any Russian response, although the U.S. and its allies seem to have been taking particular care not to target Russian bases in Syria.

So it seems to be an uncertain world out there and uncertainty tends to be good for investment in precious metals, particularly when other options are beginning to look shaky – like equities and bitcoin. This is all positive for gold – and should be even more so for silver which could well see a turnaround from its poor performance year to date. But as we noted above downside is relatively limited which enhances the investment premise.

Gold has also been flowing into the big GLD gold ETF which has added nearly 30 metric tons so far this year after seeing holdings drop in February. This is a sign that institutional interest is returning into the precious metals representing a positive change in sentiment. As noted, if gold advances, as it seems set fair to do, silver should, on past performance, be the even better buy . In the short to medium term we do see gold rising to close to $1,400 and the GSR dropping to perhaps 75 which would put silver at $18.67 – a rise of 12.25%. No promises, but not outside the bounds of possibility.