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

Gold and silver prices both hit fresh records in December, thanks to economic and policy uncertainty, along with geopolitical concerns. Gold climbed to an all-time high of $4,500 per ounce this week for the first time, marking a gain of about 70% for the year.

Silver, however, has delivered even stronger performance. Silver rose about a massive 140% since the start of the year (as of Dec. 23, 2025).

Silver’s Historic Catch-Up to Gold

Market experts say silver’s outsized gains reflect its traditional behavior during precious metal bull markets. “Historically, silver tends to lag gold early in a bull run and then experiences sharp catch-up rallies, which is what we’re seeing now,” said Steven Orrell, vice president and portfolio manager at Orrell Capital Management and the OCM Gold Fund, as quoted on Yahoo Finance.

Over the past five years, silver had underperformed gold until recently, when prices surged sharply. Notably, out of the 140% year-to-date gains in iShares Silver Trust SLV, about 99% came over the past six months (as of Dec. 23, 2025). Its close association with gold as a store of value has further augmented the move.

Shrinking Gold-Silver Ratio

One key indicator highlighting silver’s strength is the gold-silver ratio, which measures how many ounces of silver are needed to match the price of one ounce of gold. In April, the ratio stood at around 104-to-1. But currently, it has narrowed to about 64-to-1, signaling that silver is gathering momentum fast relative to gold.

Why Silver Is Outperforming Gold

Several factors may be fueling silver’s faster rise.

Silver is Cheaper Than Gold: Often referred to as “poor man’s gold,” silver offers more affordable exposure to precious metals and allows investors to accumulate larger physical quantities despite price volatility and supply constraints. With 2026 expected to be a strong year for metals, silver has more chances to outperform than gold.

Easy Money Policy by Fed?: While the Fed has provided a moderately dovish outlook in its latest meeting, there are chances of easier monetary policies in the United States in 2026. Fed Chair Jerome Powell's term is set to end in May.

With President Trump being a proponent of lower rates, we might see the next Fed chair favoring additional rate cuts next year, beyond earlier expectations. Interest rate cuts boost metals’ appeal as those are non-yielding in nature and are priced in the greenback.

Silver’s Industrial Usage Higher Than Gold: Silver is a key industrial metal. Lower borrowing costs could encourage companies to finance new projects that rely on silver’s strong conductive properties, mainly in electronics and clean energy applications. The recent artificial intelligence boom is also favoring silver’s rally, as it has usage in AI data centers.

Silver’s Stronger Demand-Supply Imbalance: Silver has remained in a structural deficit since 2021, with the cumulative supply shortfall from 2021 to 2025 nearing 800 million ounces (25,000 tons), according to a sprott.com article issued in July 2025. Demand from the electrical and electronics sector has been the primary growth driver, surging 51% since 2016, reflecting silver’s status as the most electrically conductive metal, per the same source.

Gold demand in 2025 surged, driven by record investment (ETFs, bars/coins), and central bank purchases. However, weaker jewelry volumes is a drag, while supply increased modestly. Mine production, which enjoys seasonal growth in Q3, was up 2% year over year to 977 tons this year, per World Gold Council.

Ways to Invest in Gold and Silver

There are multiple ways to gain exposure to precious metals. Investors can choose digital options such as ETFs and mining stocks. Silver bullion ETFs include SLV, and abrdn Physical Silver Shares ETF SIVR while silver mining stocks include Global X Silver Miners ETF SIL and Amplify Junior Silver Miners ETF SILJ.

Meanwhile, gold miners include the likes of VanEck Gold Miners ETF GDX and VanEck Junior Gold Miners ETF GDXJ. Gold bullion ETFs include SPDR Gold Shares GLD and iShares Gold Trust IAU.

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This article originally published on Zacks Investment Research (zacks.com).

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