A Major Shortage in Gold and Silver Makes These ETFs Safer Buys Today

Core Insights - The surge in physical buying of silver in India due to the Diwali holiday has led to significant spot premiums, indicating a potential shift in the precious metals market dynamics towards supply and demand over paper trading [1] - Both gold and silver have seen spot prices rise over 150%, with recent backwardation suggesting a physical metals shortage [1] Industrial Reasons - Gold is increasingly used in medical applications such as pacemakers and imaging, while silver is valued for its electrical conductivity in various technologies [5][7] - The demand for solar panels and AI technologies is driving significant physical silver purchases, particularly from China and Saudi Arabia [7] Economic Reasons - Inflation under current economic policies has been a major driver for the bull run in gold and silver prices since 2022, with the US dollar losing significant purchasing power [9][10] Geopolitical Reasons - A global trend towards de-dollarization, led by BRICS nations, is contributing to increased accumulation of physical gold and silver [19] - Central banks are hoarding gold and silver at an accelerated rate, further impacting supply dynamics [19] Systemic Reasons - The paper silver market is significantly larger than the available physical silver, leading to concerns about the reliability of futures markets [21][24] - Current shortages are exacerbated by refinery capacity issues and increased hoarding at the sovereign level [21][24] ETFs to Consider - Various ETFs such as Abrdn Physical Silver Shares ETF, Sprott Physical Silver Trust, and SPDR Gold Trust are highlighted as potential investment vehicles that track the spot prices of silver and gold [2][3][26]