Silver and crude oil prices reverse due to two structural changes in China

In the international commodities market of 2025, the rise in precious metals and the decline in oil prices are attracting attention. A symbolic event is that the price of silver per standard unit has exceeded the price of crude oil for the first time in 44 years since 1980. This historic “reversal” reflects two structural changes: China’s accelerated decarbonization trend and the long-term risk of deflation in the domestic economy.

In mid-December, a report by Michael Hartnett, a renowned strategist at Bank of America Securities (BofA Securities), sparked discussion among market insiders. The chart he focused on was the “oil-to-silver price ratio.” Calculated by dividing the price of one barrel of oil by the price of one ounce of silver, this ratio has remained below 1 since December. Excluding anomalies during the COVID-19 pandemic, a clear reversal between the two prices is the first since 1980.

On December 24, the London spot price, an international indicator for silver, rose to $72 per ounce, hitting a record high. This is 2.5 times higher than at the end of 2024. As for crude oil, U.S. West Texas Intermediate (WTI) futures prices fell below $55 per barrel in mid-December, reaching the lowest point in about 4 years and 10 months. Simple calculations show that about 31 grams of silver can buy one barrel of oil.

Continue reading here: Nikkei Chinese Web

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