Silver ETFs Outshining Gold?

Author: Corey McDowell - Economics Editor

Published: 14 Jul 2020

Last Updated: 2 Feb 2023


Whilst there has been plenty of attention on the record inflow into gold exchange traded funds (ETFs) this year, the situation surrounding silver ETFs has glossed over most analysts until recently. Silver prices have hit a ten-month high, with the precious metal currently priced at £15.10 per troy ounce.

Silver Bars

Silver on the Up?

Although trading in silver is worth barely a tenth of what gold sees each day, the grey precious metal has been at the forefront of speculator activity. A collapse in industrial demand in March saw silver plummet to a low of £9.60 per ounce, but now the precious metal is seeing a rebound due to a resurgence in demand from both the industrial sector and investors. As a result, the silver price has jumped by almost 21% over the last three months. Contrast this with gold, stock markets and government bonds and it is not hard to see why silver is now attracting so much attention.

Gold ETFs vs Silver ETFs

The World Gold Council (WGC) has again reported of record inflows in gold-backed ETFs - this means global gold holding are at an all-time high of 3,621 metric tons. In particular, the largest gold ETF, SPDR Gold Shares, saw inflows of 56 metric tons for the month of June, bringing its total gold value to $62.75 billion.

Not to be outdone, silver exchange traded products (ETPs), which include silver ETFs, have also recorded record-high inflows. According to The Silver Institute, the ETP growth in the first half of 2020 of 6096 metric tons comfortably surpassed the previous record annual inflow of 4634 metric tons set in 2009. To compare against SPDR Gold Shares (GLD), the biggest silver ETF, iShares Silver Trust, is now valued at $9.72 billion. This is a fraction of the worth of GLD, but the massive amount of inflows shows that the drive into the safe haven of precious metals is not limited to gold alone.

Gold and Silver Prices

As mentioned previously, the price of silver has risen by over a fifth over the last three months. To the extent this is driven by investors is unknown, as silver is far more susceptible to changes in industrial demand. Gold, however, is still primarily bought as an investment.

Comparing to silver’s 21% rise in price, gold has increased by 4.93% over the last 3 months, leaving the yellow precious metal being priced at £1,441.02 at the time of writing. This may sound disappointing when comparing the two against each other, but precious metal investors will know that silver tends to be a more ‘adventurous’ option compared to gold due to its reputation for volatility. Both metals have their attractions, and together would be an excellent addition to any precious metal investment portfolio.

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