Silver Surges Past Gold as Industrial Demand Takes Center Stage
Precious metals have made a strong comeback in recent months, and gold is leading the charge. Gold prices broke past $2,060 an ounce in December 2023 and peaked at a record-shattering $5,590 an ounce in late January, with a gain of roughly 170% from its starting point.
However, silver has outperformed gold over the same period, with a massive 405% return powered by industrial demand. Silver started around $24 an ounce and topped out above $121, before pulling back to near $65. This is significant because nearly half of annual silver demand comes from industrial use.
The recent bounce in gold prices has also shown up in fund flows, with the VanEck Gold Miners ETF (GDX) attracting $9 million in retail inflows on Wednesday and $25 million on Friday, its largest single-day inflow in at least a year. However, investors may want to consider owning silver directly through the iShares Silver Trust ETF (SLV), which offers direct exposure to silver's stronger momentum.
The physical silver supply shortage has stretched into its sixth year and is growing, further supporting the demand story for silver. With gold prices still up well over 100% from their late-2023 starting point, investors may want to consider silver as a more compelling pick in the precious metals market.