As silver is cheaper than gold, it is often referred to as the 'poor man's gold'. This year, gold has skyrocketed by approximately 30%, briefly surpassing $3,500 per ounce. This reaffirms gold's role as a hedge against financial turmoil. However, another less favored precious metal, silver, might soon take the spotlight. According to the Wall Street Journal, while gold is a controversial asset with both proponents and critics, historical data suggests that gold often outperforms other assets during crises.
According to FactSet data:
Gold showed a return of 113% over the past decade compared to the S&P 500's 78%. Although gold reached a historical high in USD terms, it has retreated somewhat following a calming of market sentiments towards trade and monetary policy. However, it has still surged by about 41% in the past 12 months.
Lucky for investors, historical trends indicate that silver might follow suit. Over the past year, silver has increased by approximately 23%, outperforming the S&P 500's 6% during the same period. This is related to silver's dual nature as a precious metal with industrial uses and economic sensitivity. Currently, the gold-to-silver price ratio is 98, down slightly from over 100 earlier this week, indicating investor interest in this asset relationship.