Measuring the Impact of Silver versus Gold in Your Portfolio

Much of the time, gold steals all the headlines and the spotlight. But, there is another precious metal in the background—that offers a less expensive entry point for accumulation—yet still offers the same portfolio diversification and risk reduction benefits. That’s silver of course.

Historically, silver has proven its value during economic and geopolitical crises. In ancient and modern times, silver has acted as a store of value, an asset to preserve and grow wealth, a hedge against inflation, currency devaluation and even systemic financial instability.

Of course, both gold and silver offer investors safety during crisis periods—including the 2008 Global Financial Crisis.

“Looking back to the Great Financial Crisis which morphed into the European Debt Crisis ( the period from 2007 to 2012) silver prices rose by $40 – a 495% increase from the underlying trend. (Gold prices rose by $1100, or 238%, over the same time period,) according to The Silver Institute’s November 2024 research report.

Silver Performance during Covid

More recently, consider recent silver performance during the Covid crisis. The price of silver more than doubled as governments and central banks flooded the financial system with liquidity. Silver soared from $12.00 an ounce in March to $29.20 in August 2020.

Then, silver moved into a trading range for several years between roughly $18.00 and $26.00. Silver shot to the top of that range several times due to investor safe haven demand, notably when Russia first invaded Ukraine and then when the Silicon Valley Bank collapsed.

Earlier in 2024, silver advanced even higher on expectations for the Federal Reserve to begin reducing interest rates (which it has) and amid rising geopolitical tensions on several war fronts.

Silver vs Gold’s Performance to Geopolitical Events

In recent years, silver’s response—and price increase—to geopolitical events has been greater than gold’s reaction. Let’s look at a very geopolitical events and the impact on silver and gold with the percent change to the peak.

Data source: Silver Institute November 2024 report, LSEG, Reuters and Capitalight Research.

Silver Has a Dual Demand Stream

In addition to silver’s value as a monetary metal, silver is also widely used in manufacturing and industry, with new applications being discovered every day. Global silver demand is forecast to reach over 1.2 billion ounces in 2024, according to The Silver Institute. Silver is seeing increased demand from electronics, renewable energy, and the automotive sectors.

Silver as Part of Your Investment Strategy

“Integrating silver into an investment strategy not only capitalizes on its industrial utility but also leverages its historical role as a safe haven asset, ensuring a balanced and resilient portfolio,” The Silver Institute said.

Owning silver comes with the same diversification properties as gold. However, at its current price point, it is more accessible than gold at $2,670.50 an ounce. If you’ve been looking for a way to scale your exposure to the safety of precious metals, investing in silver is a cost-effective way to increase your wealth protection. Explore your options today with silver coins and bars.

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