Silver vs. Gold: Octa Broker's Expert Take on the Future of Precious Metals

Octa Broker

There are two major silver market growth drivers:

• Industrial Demand: Silver's use in renewable energy, particularly solar panels, electronics, and EV manufacturing continues to expand, distinguishing it from gold, which primarily serves investment and jewellery purposes. ^[5]
• Macroeconomic Trends: While both silver and gold typically hedge against inflation, silver price drops can be more significant compared to gold in times of economic uncertainty. For example, during the COVID-19 crisis, silver experienced^[6] a significant negative return of –20.0%, while gold delivered a positive return of 5.1% in the same period.

Those who consider opting for silver instead of gold should closely analyse both assets and compare their investment risks, nature, and potential profits. Here's a brief overview of their pros and cons.

• Liquidity & Market Depth: While gold remains a more liquid asset, silver’s increasing institutional interest is narrowing this gap, so the difference in liquidity is minor.
• Volatility & Risk: While silver experiences greater price swings than gold, its volatility presents significant profit-making opportunities for active traders who practice strict risk management.
• Portfolio Diversification: Silver serves as both an inflation hedge and a strategic asset tied to industrial demand.

‘Silver's long-term value is stable because of its underlying supply-demand dynamics. The metal is widely used in electronics, renewable energy, and medicine’, explains Kar Yong Ang. ‘The Silver Institute expects^[7] the total silver supply to increase by 3 percent and reach 1.05 ounces, an 11-year high. The demand is projected to remain at 1.20 billion ounces this year. Considering this, the demand is likely to outpace even the increasing supply. Although the demand for jewellery and silverware is to decline, gains are expected in the consumer electronics market and industrial fabrication. As a result, the deficit is likely to take place’, he adds.

Silver's strong market momentum, industrial applications, especially for renewable energy and solar panels in particular, and potential price appreciation make it an asset to watch in 2025. While volatility remains a factor, strategic investments in silver may yield higher returns compared to gold. Traders who aim to deal with the asset should address it carefully.

Firstly, keep an eye on inflation trends, central bank policies, and industrial demand to conduct fundamental analysis and identify factors of potential price swings. To manage risks, balance your portfolio and do not build an oversized position in any single asset. If your trading budget is limited, especially after you diversify your investments, you can access an increased balance through trading instruments like CFDs. Platforms like Octa broker provide flexible CFD trading options for silver, allowing traders to capitalise on short-term price movements.

Disclaimer: Trading involves risks and may not be suitable for all investors. Use your expertise wisely and evaluate all associated risks before making an investment decision.

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References

1. ^{^} Media OutReach Newswire (www.media-outreach.com)
2. ^{^} leap to $40 per troy ounce (www.capitaleconomics.com)
3. ^{^} increased by 18% (economictimes.indiatimes.com)
4. ^{^} both an investment and industrial metal (www.cityindex.com)
5. ^{^} expand (www.thehindu.com)
6. ^{^} experienced (economictimes.indiatimes.com)
7. ^{^} expects (silverinstitute.org)