Often referred to as ‘poor man’s gold’ or ‘gold’s little brother’, silver caused quite a stir last year. It even outperformed gold, appreciating 45 percent in 2025 alone and more than 278 percent over the last ten years. Within the past twelve months, silver has seen a price increase of 116 percent, and 388 percent over the last ten years. Like gold, silver is considered a long-term store of value and is highly liquid in trading. There are, however, important differences between the two precious metals which should be considered before making an investment decision.
Gold offers significantly better portfolio diversification
In calm economic phases, the Gold price remains largely neutral compared to stocks and bonds, while its development turns contrary in times of turmoil. In contrast to gold, silver is used to a significantly lesser extent for investment purposes. The lion’s share of the annual silver production goes straight into industrial applications. Silver therefore tends to perform similarly to the stock market. The price of silver is also significantly more volatile than that of gold. Due to these two factors, silver is not as effective as gold in diversifying and stabilizing a portfolio, and silver cannot serve as a full replacement for gold in a portfolio.
Gold and silver: complementary portfolio relationship
As silver is mainly used in future technologies for electromobility, solar energy, medical technology and electronics, it can support portfolio performance, especially in phases of economic upturn in these sectors. Gold on the other hand shines more brightly in times of crisis. In 2025, both conditions occurred on a global level, which is why both precious metals simultaneously experienced record highs.
Gold/silver ratio: valuation aid for Investors
The gold/silver ratio calculates the ratio of the gold price to that of silver at a given point in time by dividing the price of gold by the price of silver. This simple indicator expresses which of the two precious metals is over- or undervalued – and allows price forecasts for the near future. Market experts consider a value between 40 and 80 balanced. A look at the last 50 years confirms this: the gold/silver ratio averaged 65. If it rises above 80, silver is considered undervalued and could become more expensive in the foreseeable future. If the gold/silver ratio is below 40, silver is relatively expensive compared to gold and could lose value. At the beginning of January 2026, the value was 58 – a balanced ratio, meaning that, empirically speaking, no major price adjustments are to be expected for either precious metal. The gold/silver ratio can serve as guidance for a purchasing decision in favor of gold or silver at a given time. It is, however, only helpful for investors wishing to include both asset classes in their portfolio.