Is Silver More Valuable as a Precious Metal or an Industrial Metal?

Is Silver More Valuable as a Precious Metal or an Industrial Metal?


May. 3 2021, Updated 10:56 a.m. ET

Industrial or precious metal?

Silver often plays the dual role of haven asset and industrial metal. Because silver isn’t preferred as much as gold during market turbulence, it has a comparatively small role as a haven asset. Silver is popular among investors who want to hedge against the overall risk in the market as well as those who want to link their gains to industrial performance.

The chart below shows the funds flowing to silver over the past 18 months.

Article continues below advertisement
ishares silver trustslv fund flow

(SLV) Fund Flow 2017-01-20" width="300" height="214">The funds flowing into silver have resurfaced so far in January 2017. In December 2016, we saw investors turning their backs on silver.The iShares Silver Trust ETF (SLV) and the Global X Silver Miners ETF (SIL) have seen price rises in 2017. SLV has gained 7.7% year-to-date versus a 1% increase in the benchmark S&P 500 index during the same period.The rationale behind the comparison between silver and the overall market is that silver could closely associate with the overall market. Silver is extensively used in the industrial sector.

Silver funds and miners

Silver has been falling for the past few years, despite surging demand for its industrial use. Fundamentally, silver seems to be strong due to rising demand and a year-over-year shortfall in its supply.Silver miners such as First Majestic Silver (AG), Pan American Silver (PAAS), Coeur Mining (CDE), and Hecla Mining (HL) tend to follow silver’s lead. These miners have performed better than their precious metals counterparts over the past month.In our next article, we’ll look at the comparative performance of gold and silver via the gold-silver spread. 


More From Market Realist

  • Open sign on a sidewalk
    Macroeconomic Analysis
    Top Reopening Stocks to Play the Shifting Market Sentiment
  • Morgan Stanley sign and stock numbers
    Macroeconomic Analysis
    Morgan Stanley's Buyback Stock Picks in 2021
  • Black Wall Street sign is sign of ethical investing
    Macroeconomic Analysis
    Ethical Investing Stocks and Funds for Your 2021 Portfolio
  • New York City skyline and Goldman Sachs logo
    Macroeconomic Analysis
    Goldman Sachs: Options Trade Picks to Play Earnings Season Volatility
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.