A record-breaking rally for gold may yet continue, particularly as investors position for interest rate cuts — but analysts say silver appears well placed to outshine the yellow metal in the second half of the year.

Spot gold prices on Monday edged higher to $2,178 per ounce, after settling at their highest since 1979 on Thursday last week.

Spot silver prices, meanwhile, were last seen up 0.2% at $24.36 per ounce at 6:24 a.m. London time (1:24 a.m. ET). The contract, which rose over 5% last week, on Thursday settled at its highest level since late December.

Precious metal prices have pushed higher in recent weeks amid growing expectations of U.S. interest rate cuts. Federal Reserve Chair Jerome Powell on Thursday said that inflation is “not far” from where it needs to be for the central bank to start cutting rates.

Gold, which is typically considered a “safe haven” asset at times of financial uncertainty, has rallied despite high interest rates and a relatively strong U.S. dollar.

“If you look at gold’s correlations, what you can see is that actually despite the narrative of it being a defensive asset, really it oscillates between the two. It can sometimes perform in line with risk and sometimes against risk,” Marcus Garvey, head of commodities strategy at Macquarie, told CNBC’s “Street Signs Europe” on Friday.

“What you need to then get back to is what is the underlying causation of those moves and why is gold reacting in one way or the other, and I think here, really the thing that is setting up gold very well … is expectations of rate cuts. That’s clearly risk positive.”

Garvey said near-term U.S. jobs and inflation data could determine whether gold prices, which he described as “incredibly resilient” so far, push as high as $2,300 or drop back to around $2,100.

“From silver’s perspective, I mean it is sort of round numbers really, you want to get comfortably clear of the $24 level to feel that you have got a bit more room to run. While you are only just north of it, the scope for a correction back down is clearly still a vulnerability,” Garvey said.

“The last thing I might add on silver though, as a dual precious and industrial metal, if we start to see global growth pick up a bit more over the course of this year — which is very much our base case — then I would expect silver to go from a relative underperformer to gold to being a relative outperformer to gold over really the third and fourth quarter of this year.”

A ‘terrific year’ ahead for silver?

Gold and silver prices have traditionally shown a strong positive correlation, although silver has sometimes been described as the “poorer cousin” of gold.

Earlier in the year, the Silver Institute said in a report that global silver demand was expected to reach 1.2 billion ounces in 2024, hitting its second-highest level on record.

The institute, a non-profit international association composed of various members across the silver industry, told CNBC last month that it expects silver to have a “terrific year,” particularly in terms of demand.

Silver is primarily used for industrial purposes and commonly incorporated in the manufacturing of automobiles, solar panels, jewelry and electronics.

“Here’s what usually happens with silver: it does move with gold, but it moves later,” Randy Smallwood, CEO of Wheaton Precious Metals, told CNBC in early February.

“Gold will shoot up first and then you will see silver take off rapidly. And silver always outperforms. It’s just late.”

— CNBC’s Lee Ying Shan contributed to this report.