Commodities & indices · Beginner

Precious Metals Beyond Gold

Silver is not a smaller gold. Half its demand comes from factories, and that half is what gets priced in a growth shock.

Last reviewed 15 September 2026 by the MarketPro research desk · Editorial policy

In short

Silver, platinum and palladium differ from gold because industrial demand drives a large share of their consumption. Roughly half of silver demand is industrial, and platinum and palladium are dominated by autocatalyst use with supply concentrated in South Africa and Russia. They are therefore more volatile than gold, more sensitive to manufacturing activity, and less reliable as safe-haven assets during a growth shock.

What to remember

Silver fell about 32% in the nine sessions to 18 March 2020, against roughly 12% for gold over the same window.
About half of silver demand is industrial, so silver asks both the monetary question and the manufacturing question.
The gold to silver ratio has no anchor. It reached 32 in 2011 and above 120 in March 2020, and can stay extreme for years.
Around 70% of mined platinum comes from South Africa, and palladium fell by roughly two thirds from its March 2022 peak.
Silver's average range is roughly double gold's, so the same notional carries double the daily swing and needs half the size.

Lesson 13 of 16 in Commodities and indices

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Silver fell 32% in the fortnight gold fell 12%

Between 6 and 18 March 2020, gold fell roughly 12%, from about 1,675 to about 1,477 USD an ounce. Over the same nine sessions silver fell from around 17.50 to about 12.00 USD an ounce, a drop of roughly 32%.

Two metals, the same crisis, and one lost nearly three times as much as the other. Anyone who had treated silver as "cheap gold" and sized it the way they size gold discovered the difference in nine. Silver is not a smaller gold. It is a partly industrial commodity that happens to share a safe-haven story, and in a growth shock the industrial half is what gets priced.

That split is the single most useful thing to know about the metals beyond gold, and it explains most of what follows.

Half of silver's demand goes into a factory

In recent years roughly half of total silver demand has been industrial, spread across electronics, electrical contacts, brazing alloys and, increasingly, photovoltaic cells. Investment demand through coins, bars and funds is the other large block, with jewellery and silverware behind them.

Gold's demand profile is almost the reverse. Jewellery and investment dominate, central bank reserve buying is a large and growing block that responds to policy rather than price, and industrial use is a small share. So the two metals answer to different questions. Gold asks what real yields and central banks are doing. Silver asks that too, and then also asks what manufacturing output is doing.

When both questions point the same way, silver moves further than gold in the same direction, which is where its reputation for leverage to the gold trade comes from. When they conflict, as in a recession scare that also lowers interest rates, silver can go nowhere while gold rallies.

The gold to silver ratio, and what 120 meant

The gold to silver ratio is simply the gold price divided by the silver price, and it is the standard way to read the two against each other. Over the past fifty years it has spent most of its time somewhere between 40 and 90.

It reached about 32 in 2011, during a silver mania, and spiked above 120 in March 2020, when industrial demand expectations collapsed and gold held up better. Both extremes reverted, which is why the ratio is popular with relative-value traders.

Treat it carefully. The ratio has no anchor: there is no economic law fixing the relationship, since the monetary link between the two metals ended a long time ago and their demand mixes have diverged since. A high ratio tells you silver is cheap relative to gold by historical standards, and it can stay that way for years while you pay financing on a spread position. It is a context indicator, not a trigger.

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Platinum and palladium: two countries, most of the supply

The platinum group metals are industrial commodities with a precious-metal label. Roughly 70% of mined platinum comes from South Africa, and palladium supply is concentrated between Russia and South Africa, so a power crisis, a strike or a sanctions decision in one place moves the entire global market.

Demand is equally concentrated. Both metals go heavily into autocatalysts, which ties them to vehicle production, emissions regulation and the pace of the switch to battery electric vehicles, since a battery car has no catalytic converter at all.

Palladium shows what that concentration does to a price. It traded above 3,400 USD an ounce in March 2022 on supply fears, then fell by roughly two thirds over the following two years as substitution and weaker demand took hold. That is a commodity with a genuine supply story behaving nothing like a monetary metal, and no amount of safe-haven framing would have helped a holder through it.

Why the same notional is double the risk

Here is the sizing consequence, and it is the part most retail accounts get wrong. Gold's average true range typically runs 1% to 1.5% of price. Silver's typically runs 2% to 3%. Platinum and palladium sit at the higher end and go further in a supply event.

So take 10,000 USD of notional exposure. In gold, an average day moves that position by roughly 125 USD. In silver, the same 10,000 USD moves by roughly 250 USD. Identical money on the screen, double the daily swing, and if your stop is set in percentage terms you need it twice as wide in silver to survive the same amount of normal noise.

Work it the other way and the arithmetic gets concrete. On a 5,000 USD account risking 1%, so 50 USD, with a stop at 1.5 times ATR: in gold at 2,400 USD and a 30 USD ATR, the stop is 45 USD and you can hold about 1.1 ounces. In silver at 30 USD with a 0.75 USD ATR, the stop is 1.13 USD and you can hold about 44 ounces, which is 1,320 USD of notional, not 2,640. Halving the notional is the correct response to doubling the volatility. Check both on the position size calculator rather than carrying one lot size between them.

Trading the smaller metals without the gold playbook

Three practical adjustments cover most of it.

Watch the spread, not just the price. Silver, platinum and palladium are far less liquid than gold. Broker spreads on palladium in particular can be several times wider as a share of the daily range, which quietly destroys short-term strategies that work fine on gold.
Track the industrial calendar. Manufacturing surveys, vehicle production figures and solar installation data matter to silver and the platinum group in a way they do not to gold.
Check the correlation you are assuming. Silver and gold usually move together, and the relationship weakens sharply whenever industrial demand is the driver. Holding both is not diversification, and the risk management guide explains how to count them as one exposure.

The through-line is that these are industrial commodities wearing a precious-metal label. Price them off factory demand and concentrated supply first, and treat whatever safe-haven behaviour turns up as a second-order effect rather than the reason to be in them.

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Written and reviewed by the MarketPro research desk

MarketPro is a trading-signal and trading-education app operated by Harajuku Holdings LTD (Cyprus). Our signal desk publishes and tracks every trade idea in-app, and every page here is checked against the app's live behaviour before publishing. Last reviewed 15 September 2026. How we produce signals and content · About MarketPro

FAQ

Precious Metals Beyond Gold: questions

Is silver a safe-haven asset like gold?

Only partly. Silver shares gold's monetary history and attracts investment demand during periods of currency or inflation stress, but roughly half of silver consumption is industrial, in electronics, electrical components and solar cells. When a crisis is also a growth shock, the industrial half is repriced downwards at the same time the monetary half is bid up. In March 2020 that combination left silver down about 32% while gold fell about 12%.

What does the gold to silver ratio tell you?

It shows how many ounces of silver one ounce of gold buys, and it is used to judge whether silver looks cheap or expensive relative to gold. Over the past fifty years it has spent most of its time between roughly 40 and 90, reaching about 32 in 2011 and spiking above 120 in March 2020. It is a context indicator rather than a signal, because no economic relationship anchors the two metals together, and extreme readings can persist for years.

Why is palladium so volatile?

Because both its supply and its demand are highly concentrated. Most mined palladium comes from Russia and South Africa, so a strike, a power crisis or a sanctions decision affects the whole market at once. Demand is dominated by autocatalysts, which links it to vehicle production, emissions rules and the shift towards battery electric vehicles that use no catalytic converter. Palladium traded above 3,400 USD an ounce in March 2022 and lost roughly two thirds of that over the following two years.

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