The question we hear most when someone considers investing in precious metals for the first time is always the same: gold or silver? The short answer is that they are not mutually exclusive and that each plays a distinct role in a wealth portfolio. The long answer requires understanding how each one works.
How they are alike and how they differ
Both gold and silver are physical, tangible precious metals, with no third-party counterparty and thousands of years of history as a store of value. In their investment format, both are exempt from VAT in Spain. And both have historically performed well in environments of high inflation and monetary expansion.
The differences, however, are significant:
GOLD
- The monetary metal par excellence. 5,000 years as a store of value.
- Demand mainly financial: central banks, institutional investors.
- Greater price stability. Lower volatility.
- Better performance in systemic crises and recessions.
- Current price: ~$4,900 - $5,100/oz (May 2026)
- Higher entry barrier per unit.
SILVER
- A metal with a dual nature: monetary and industrial.
- Growing industrial demand: solar panels, electronics, batteries.
- Greater volatility: it rises more in bull cycles, falls more in bear cycles.
- Better performance in phases of economic expansion.
- Current price: ~$32 - $36/oz (May 2026)
- Much lower entry barrier per unit.
The gold/silver ratio: the key metric
The gold/silver ratio indicates how many ounces of silver are needed to buy one ounce of gold. Historically, this ratio has fluctuated between 15 and 100. A high ratio, above 80, suggests that silver is cheap relative to gold. A low ratio, below 40, suggests the opposite.
In May 2026, the ratio stands at approximately 85 to 95, in a historically high zone. This does not guarantee that silver will rise immediately, but it does indicate that, in historical terms, it is cheap relative to gold.
"A high gold/silver ratio is not a buy signal in itself; it is a signal that silver has more room for relative recovery when the metals cycle accelerates."
The industrial demand for silver: the differentiating factor
Approximately 50-55% of global silver demand comes from industrial uses. And here lies the factor that changes the equation for the coming years: the energy transition.
Photovoltaic solar panels are the largest industrial consumer of silver in the world. A standard-size solar panel uses between 15 and 20 grams of silver. With the massive expansion of solar energy projected for 2025-2030, driven by the climate plans of Europe, China and the United States, industrial demand for silver is growing at rates that mining production cannot keep up with.
Silver is also an essential component in advanced electronics, electric vehicles, semiconductors and medical technology. The sum of all these demand vectors creates a structurally positive scenario for the price over the medium and long term.
Taxation: gold's advantage over silver
Here gold has a clear and decisive advantage. Investment gold — bars with a minimum purity of 99.5% and recognised minted coins — is exempt from VAT in Spain (and throughout the European Union). Investment silver, by contrast, is taxed at the reduced VAT rate of 10%.
This means that when you buy physical silver, you already pay a 10% surcharge from the very first moment. For the investment to be profitable, the price of silver has to rise at least that 10% before you begin to gain. It is an initial cost that gold does not have.
| Characteristic | Gold | Silver |
|---|---|---|
| VAT on purchase | 0% (exempt) | 10% |
| Taxation on sale | Capital gain (personal income tax) | Capital gain (personal income tax) |
| Volatility | Low-medium | High |
| Upside potential in a bull cycle | High | Very high |
| Industrial demand | Low (~10%) | High (~50%) |
| Accessibility per unit | Medium-high | Very high |
| Correlation with crises | Very high | Medium |
Which one fits each profile best?
Gold is more suitable for the investor who is looking mainly for long-term preservation of value, a hedge against inflation and protection in systemic crisis scenarios. It is the metal of "not losing" rather than of "gaining a lot".
Silver is more suitable for the investor willing to take on greater volatility in exchange for greater upside potential in expansion cycles. It is the metal that amplifies the movements of the metals market: it rises more when the cycle is bullish, but it also falls more in corrections.
The combination of both, weighted more heavily towards gold, is the most common strategy among investors who understand the role of metals in a balanced wealth portfolio. Gold acts as an anchor and silver as an accelerator.
A real case: gold and silver combined
A client of Equus Capital invested €8,000 in a combined portfolio of gold and silver in January 2025. The current valuation of that portfolio is €12,585, an appreciation of +58.91% in a little over a year. Silver amplified the upward movement of the cycle, while gold provided a base of stability.
Conclusion: it is not an either/or choice
The question is not "gold or silver?" but "in what proportion and with what objective?". Gold as the foundation of wealth preservation, silver as a complement with greater potential for appreciation. Both in physical format, with secure custody and no financial counterparty.
The entry barrier is lower than most people think. And the timing — with the gold/silver ratio in a historically high zone and industrial demand for silver expanding — is, to say the least, interesting for considering a position.