Precious metals have had a banner couple of years, to say the very least. Gold is up 152% over the past five years and 54% in the past 12 months alone.
It’s not hard to see why either. Gold and silver are the oldest hedges against chaos and uncertainty in human history. They have always held value, and they likely always will.
But which precious metal should you add to your portfolio? Based on returns alone, the answer is fairly obvious. Silver has dramatically outperformed gold over the entirety of the precious metal bull run. Over the past five years, silver is up 200%, and it’s up 135% over the past 12 months alone.
And the easiest way to get some silver exposure in your portfolio is with a silver ETF like iShares Silver Trust (SLV +3.35%).
Like most ETFs, this one does exactly what it says on the tin. The iShares Silver Trust tracks the day-to-day movement of the price of silver bullion, and you don’t need to go through the hassle of buying and selling physical silver.
The ETF’s one-year return is 112%, and over the past 12 months, the ETF actually beat the return of physical silver itself at 139%. And I don’t think the trends spurring on silver’s bull run will come to an end anytime soon.
Here’s what I mean.
Image source: Getty Images.
Silver or gold, silver or gold?
If you watch the news for approximately 15 minutes, you’ll likely become very aware of how chaotic and unpredictable the world has become over the past few years.
Since the start of the decade, we have seen a global pandemic break out and the largest war in Europe since World War II began. It’s still ongoing, and new conflicts are breaking out around the world, most recently in the Middle East between the U.S., Iran, and Israel.
The stock market oscillates violently between fearful and greedy at an alarming rate, and as a result, it’s extremely volatile. Investors have flocked to precious metals as a way of insulating their portfolios from that volatility.
They aren’t the only ones either. Central banks around the world, most prominently those of China, India, Poland, and Turkey, have been on the biggest gold-buying spree since 1967, and it has continued since 2022.
Additionally, there are new industrial uses for both gold and silver driving up their prices, but especially for silver. Industrial demand for the metal grew 32% from 2020 to 2024 alone. Solar panels require about 20 grams of silver each, and electric vehicles (EVs) need anywhere from 25 to 50 grams per car.
Finally, concerns about the stability and ongoing devaluation of fiat currencies, especially the U.S. dollar, have many countries looking to secure their own finances with gold and silver.
After all, the U.S. national debt has now exceeded $39 trillion, and our debt-to-GDP ratio is 124.8%. Not that long ago, in 2000, it was just 58.3%.
Those are all concerning numbers for the world’s reserve currency and are likely contributing to the central bank precious metal buying spree over the past few years.
Today’s Change
(3.35%) $2.39
Current Price
$73.63
Key Data Points
Day’s Range
$73.42 – $75.16
52wk Range
$29.04 – $109.83
Volume
35M
Avg Vol
85M
Durable trends, precious metals
Even though both gold and silver have pulled back since February, precious metal prices remain elevated, and year to date, both gold and silver are up about 10%, even with the pullback.
What that tells me is that the trends driving the gold and silver bull run are durable and likely to continue for the foreseeable future. Silver is just shy of $80 an ounce as I write this, while a share of iShares Silver Trust is about $71.
The ETF allows you to capitalize on silver’s likely continued run at a lower entry price and without any of the logistical hassle of trading in physical assets. That sounds like a win-win to me, and I think iShares Silver Trust is worth your consideration as a precious metals play.