Silver and gold

[DWoods]

AGQ vs UGL. Silver has crushed gold over the past few months. Just amazing the difference.

That leads me to this question, is silver not considered a good hedge, only gold?

[Frank1 Grossmann]

Silver is not really a good hedge as most of it is consumed from the industry. During longer market correction normally industrial silver consumption drops with production which suppresses the silver price. Also, silver is dangerous to keep due to the 2-3x higher volatility than gold. Gold has not much industrial use. The main purpose is preserving wealth during inflationary periods when the dollar loses value and central banks print money like crazy.

[DWoods]

Thanks!

[Andrix88]

Have you ever tried creating a strategy that switches among the precious metals? it could work, I think

[Frank1 Grossmann]

I don’t think this would work. They are highly correlated and have very different volatility.

[Andrix88]

It was just an idea to diversify and ride the appreciation when it comes, as for example palladium increased a lot during the last years and now silver looks to be in a bull run as gold was in 2019

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