Silver vs gold as an investment: returns, volatility and worst falls

Gold and silver are usually mentioned in the same breath, as if they were two sizes of the same idea. The data say otherwise. Over the last two decades gold behaved like a calm diversifier that held up in both big stock market crashes. Silver swung about twice as hard, fell together with stocks in both crashes, and at its worst lost three quarters of its value.

This guide puts the two side by side with our own data: return, volatility and worst fall since the first gold and silver ETFs started, next to the S&P 500. It then looks at what each did in crises and in inflation, and at the question behind most searches: is gold a good investment at all?

Silver vs gold in numbers

The cleanest long record for private investors comes from the two oldest US-listed metal ETFs: gold (GLD, since November 2004) and silver (SLV, since April 2006). Each holds the physical metal, so its price tracks the metal minus a small fee.

Source: buy & hold of GLD and SLV from their first trading days to 30 Jun 2026, the same window as the Research Terminal; daily closes; volatility and correlation from monthly returns.

Three things stand out:

• Gold earned almost as much as stocks over this period, with a smaller worst fall. Silver earned clearly less.
• Silver was about twice as volatile as gold (32.6 % against 17.2 % a year) and more volatile than stocks.
• Silver's worst fall was deeper than any fall of the S&P 500 in the same window, and it took almost nine years from the peak in April 2011 to the bottom in March 2020.

The chart starts in April 2006, when both ETFs existed. On a log scale, equal distances mean equal percentage moves, so the long flat stretch for gold after 2011 and the much deeper slide for silver are easy to compare.

Why silver swings more than gold

Gold is almost entirely a monetary and investment metal: central banks hold it, investors buy it, and jewellery demand follows its price. Silver is half precious metal, half industrial metal. A large part of its demand comes from electronics, solar panels and other industry, which ties it to the business cycle. Its market is also much smaller than the gold market, so the same flow of money moves the price further.

The result shows up in the correlations. Over 2006–2026, the monthly returns of gold and the S&P 500 had a correlation of only 0.08, close to none. Silver's correlation with stocks was 0.26: still low, but noticeably higher. Gold and silver moved together most of the time (0.79), yet in the moments that matter most for a portfolio, they parted ways.

What gold and silver did in crises

The test of a diversifier is what it does when stocks fall hard. Our data cover two severe crashes and several weaker years.

Price changes of GLD, SLV and SPY over each period.

Gold held up in both crashes; silver fell with stocks in both. In 2008, when the S&P 500 lost more than a third of its value, gold still ended the year slightly up, while silver lost almost a quarter. In the fast Covid crash, gold barely moved and silver fell almost as much as stocks.

2013 is the reminder that neither metal is a one-way bet. In a strong year for stocks, gold lost 28 % and silver 36 %. That was the middle of gold's worst fall in this period, which ran from August 2011 to December 2015 and reached −45.6 %. For a broader look at how gold, bonds and cash each behaved in every big sell-off, see our guide Gold vs bonds.

Gold, silver and inflation

Gold is often sold as protection against inflation. The long-run evidence is weaker than that sales line suggests. Erb and Harvey (2013) looked at rolling ten-year periods from 1975 to 2012: gold returned anywhere from −6 % to +20 % a year, while US inflation in the same windows only moved between 2.3 % and 7.3 %. The swings in gold dwarf the swings in inflation, so as a precise match for rising prices the record is poor.

Silver, with its industrial demand, has an even looser link to consumer prices and a stronger link to the economic cycle. In the inflation year 2022 both metals ended roughly flat (gold −0.8 %, silver +2.4 %) while stocks and bonds fell. That helped a portfolio, but one year is not a rule. How stocks and bonds themselves behave when inflation is high is covered in our stock–bond correlation guide.

Is gold a good investment?

It depends on what job it is meant to do. As a stand-alone engine of growth, gold has had long dry spells: after its 2011 peak it went almost a decade without gains (2011–2020). As a part of a portfolio, its record is better, because it tends to move independently of stocks and bonds.

Our research on 150 years of US data shows this in one number. Since 1973, with monthly rebalancing and no timing, a mix of 60 % stocks, 20 % bonds and 20 % gold had a Sharpe ratio of 0.56, against 0.51 for the classic 60/40 portfolio of stocks and bonds. The Sharpe ratio measures return per unit of risk, so the gold mix delivered a little more return for the risk taken. The difference is modest, which is the honest way to describe gold: a diversifier, not a shortcut to higher returns.

Silver's case as a portfolio diversifier is weaker on our data: higher volatility, a higher correlation with stocks, and losses in both crashes. You can test both metals in a mix of your own with the free portfolio backtest, and see how a portfolio with a small metals slice would have done in every big sell-off with the portfolio crash test.

How private investors hold gold and silver

• Physical coins and bars. No counterparty, but dealer spreads, storage and insurance cost money, and selling takes time. Silver is bulky for its value, so storage costs weigh more.
• Exchange-traded products. In the US, ETFs such as GLD and SLV hold the metal in a vault. In Europe, the usual form is an ETC (exchange-traded commodity), often physically backed; the details of backing, fees and tax treatment differ by product and country.
• Mining shares. Companies that dig the metal out of the ground carry business risk on top of the metal price. Their price swings are usually larger than the metal's own.

Whichever form, costs compound over time like any other fee. The precious metals lesson explains the drivers of both metals in more depth, and the market pages for gold and silver show the full history, worst falls and how a trend-following approach handled each.

Silver or gold: the short answer

On two decades of data, gold had the better record for a portfolio: almost the return of stocks, half the volatility of silver, a correlation with stocks near zero, and gains or small losses in both big crashes. Silver offered higher swings in both directions, lower returns and a worst fall of −76 %. Neither metal earned money in every period, and neither tracked inflation closely.

The live figures for both markets, next to their worst falls and correlations, are in the free Research Terminal.

Frequently asked questions

Hamann, H. (2026). Silver vs gold as an investment: returns, volatility and worst falls. InvestWealth.com. https://www.investwealth.com/learn/guides/silver-vs-gold

<a href="https://www.investwealth.com/learn/guides/silver-vs-gold">Silver vs gold as an investment: returns, volatility and worst falls</a> (InvestWealth.com)