Gold Or Silver ETFs: What Could Rally More in 2026?

Core Insights - Gold and silver prices reached record highs in December, with gold at $4,500 per ounce, marking a 70% increase for the year, while silver surged 140% year-to-date as of December 23, 2025 [1][2] Group 1: Silver's Performance - Silver's significant gains reflect its historical behavior in precious metal bull markets, typically lagging behind gold initially before experiencing sharp catch-up rallies [2] - Over the past five years, silver had underperformed gold until a recent surge, with 99% of the 140% year-to-date gains in iShares Silver Trust (SLV) occurring in the last six months [3] - The gold-silver ratio has narrowed from approximately 104-to-1 in April to about 64-to-1 currently, indicating silver's rapid momentum relative to gold [4] Group 2: Factors Driving Silver's Rise - Silver is considered more affordable than gold, allowing investors to accumulate larger quantities despite price volatility, which may lead to stronger performance in 2026 [5] - The Federal Reserve's potential for easier monetary policies in 2026 could enhance the appeal of non-yielding metals like silver, especially with a new Fed chair likely favoring rate cuts [6] - Silver's industrial usage is higher than gold, with lower borrowing costs potentially encouraging projects that utilize silver's conductive properties, particularly in electronics and clean energy [7] Group 3: Supply and Demand Dynamics - Silver has been in a structural deficit since 2021, with a cumulative supply shortfall nearing 800 million ounces (25,000 tons) from 2021 to 2025, driven by demand from the electrical and electronics sector [8] - Gold demand surged in 2025 due to record investments and central bank purchases, although weaker jewelry volumes have been a drag on overall demand [9] Group 4: Investment Options - Investors can gain exposure to precious metals through various digital options such as ETFs and mining stocks, with specific silver ETFs including SLV and SIVR, and silver mining stocks like SIL and SILJ [10] - Gold investment options include ETFs such as GLD and IAU, along with mining stocks like GDX and GDXJ [11]