An ETF, or Exchange-Traded Fund, pools money from investors and uses the funds to invest in specific assets such as physical silver, futures contracts, or mining stocks. Most gold and silver ETFs track the price of the underlying metal by holding physical bullion rather than shares of mining companies (those are “mining ETFs” or “equity ETFs”). Gold and silver ETFs offer investors a convenient and cost-effective way to gain exposure to precious metals without direct ownership or storage, but ETFs may not suit every investor’s goals. Alternative structures are available.
Gold ETFs
Gold exchange-traded funds (ETFs) let investors gain exposure to gold prices through the stock market. Gold ETFs charge an expense ratio that reduces net returns over time.
For some ETFs, one unit represents 1 gram of 24-karat gold; others are based on fractions of a troy ounce. The asset-management company stores gold equivalent to the number of ETF units outstanding in a secure vault. Still others are based on derivative instruments that are only suitable for advanced investors. For the purposes of this article, we’re focusing on the most common and popular ETFs.
Silver ETFs
A silver ETF invests in investment-grade silver bullion. Like gold ETFs, a silver ETF tracks the metal’s price through physical holdings. Each unit is stored in a secure vault, typically representing 1 gram of physical silver, though the amount varies by fund.
When ETF units are redeemed, investors generally receive the cash equivalent, not the underlying metal, except in rare institutional-size cases. Some investors use silver ETFs for potentially larger price swings than gold.
Gold and Silver Volatility
The best way to measure a metal’s volatility is to look at the beta measurement. Beta is the measurement of the volatility of a stock compared to the market; the asset’s price movements against the stock market price movements. A security’s beta (β) is calculated by dividing the product of the covariance of the security’s returns and the market’s returns by the variance of the market’s returns over a specified period.
From there, the number calculated determines the stock’s volatility. A Beta of 1.0 means that a stock has been as volatile as the broader market. Betas larger than 1.0 indicate greater volatility, and betas less than 1.0 indicate less volatility.
A higher volatility means more risk and reward, and a lower volatility helps decrease risk in a portfolio. Beta is calculated using historical data points and is not advised to be used to predict a stock’s future movements for long-term investments. A stock’s volatility can change over time depending on a company’s growth and other factors. Volatility is often measured by beta, which compares an asset’s price movement to that of the broader market. A beta of 1.0 indicates volatility equal to the market; values above 1.0 indicate greater volatility, and below 1.0 indicate less. Beta is derived from historical data and may not predict future movements.
Gold has historically shown lower volatility than silver. Investors often view gold as a safe-haven asset—one that tends to hold or increase value during economic uncertainty or inflationary periods.
Silver is more volatile than gold, yet it is still considered relatively stable compared to many other assets. Prices tend to react more sharply to changes in supply, demand, and speculative trading. During bullish periods, silver has historically posted larger percentage moves than gold.
Liquidity: Trading Volume and Market Depth
Gold ETFs
Gold ETFs are considered highly liquid for several reasons. Gold is a globally recognized and in-demand asset, often used by investors as a safe place to store value. This popularity makes gold-backed ETFs easily buyable and sellable on the stock market.
As a result, gold ETFs typically have high average daily trading volumes and minimal bid-ask spreads. This means you can trade them quickly and at a fair price without losing much money on transaction costs. Some gold ETFS have higher trading volumes than others. The most popular gold ETFs, like SPDR Gold Shares (GLD), trade more actively than smaller funds.
Silver ETFs
Silver ETFs are generally considered liquid and easy to trade, especially the most popular ones, like SLV. While gold ETFs such as GLD often have tighter bid-ask spreads due to higher institutional demand and total assets under management, SLV has a higher average 30-day trading volume, with over 19 million shares compared to 11 million for GLD. This makes SLV a highly efficient option for most investors, even when trading large amounts.
Historical Performance: Returns and Resilience
Gold and silver have experienced several notable performance cycles. In the early 2000s commodities boom, rising global demand, a weaker U.S. dollar, and geopolitical uncertainty drove metal prices sharply higher. Gold more than tripled in price, while silver posted even larger percentage increases. The first gold ETF was launched in 2004, and the first silver ETF in 2006, expanding market access.
Between 2008 and 2011, the global financial crisis prompted central banks to inject liquidity and cut interest rates. Investors sought perceived safe-haven assets, pushing gold and silver to record highs by 2011 and driving significant inflows into metal ETFs.
During the 2020 COVID-19 pandemic, market turmoil and expansive fiscal stimulus again boosted demand for gold and silver, aided by an influx of retail investors via trading apps and online brokerages. These patterns illustrate how precious metals often perform strongly amid economic uncertainty and monetary expansion.
Why Choose OneGold Instead?
ETFs provide a convenient way to gain exposure to gold and silver, but they typically carry higher management fees and do not permit physical redemption. The OneGold mobile app, backed by APMEX, offers direct ownership of allocated gold, silver, and platinum, generally at lower fees than most metal-focused ETFs, along with the option to take physical delivery through APMEX.
OneGold offers a more cost-effective way to store precious metals compared to popular ETFs. For example, the GLD ETF charges a 0.40% annual fee for gold holdings, while OneGold’s gold storage fee is only 0.12%. Similarly, SLV charges 0.50% annually for silver, but OneGold’s silver storage fee is just 0.30%. These lower fees help investors retain more of their portfolio’s value over time, making OneGold a smart choice for long-term precious metals investment.
OneGold has two more advantages over ETFs: better liquidity and after-hours trading. OneGold does not operate as a secondary marketplace the way that ETFs do. To buy or sell an ETF, investors must find a buyer or seller through their brokerage during trading hours. When you buy or sell precious metals through OneGold, you are buying and selling directly to OneGold, at any time of day or night, 24/7. If news breaks at 7:00 PM on a Friday after the market has closed, OneGold customers can instantly adjust their position to take advantage of the moment, while an ETF customer must wait for the market to open, eroding potential returns and increasing risk.
The combination of lower costs, superior liquidity, and access enables both risk and returns to be improved by investing in physical metals with OneGold.
