Key Advisors Group prefers gold over silver as volatility spikes

"Silver to us gets more speculation and high risk traders in the space, volatility index of silver got to historic levels, and so, when we try to go to a flight to safety we'll pick gold over silver. To us silver is when we're in a raging bull market - risk assets to us a lot of time makes more sense to be in silver."

"Gold attracts central banks, institutional allocators, and long-only defensive investors. Silver attracts a more speculative crowd, which is why its volatility index can reach historic levels during stress periods. Silver had been above $100 before pulling back into the $80s, a swing that tells you everything about the type of participant dominating that market."

"GLD has a net expense ratio of just 0.4% and has been trading since November 2004, giving it a long track record as the go-to institutional vehicle for gold exposure. Over the past year, GLD has returned 72.71%, a remarkable run for an asset traditionally viewed as defensive."

During market selloffs, investors traditionally seek metals for safety, but gold and silver serve fundamentally different purposes. Gold attracts central banks, institutional allocators, and defensive investors, making it suitable for flight-to-safety strategies. Silver, conversely, draws speculative traders and experiences historic volatility spikes during market stress. While both metals showed similar year-to-date returns, silver's path involved significantly more volatility. GLD, the SPDR Gold Trust, functions as a true defensive instrument with a 0.4% expense ratio and a long institutional track record since 2004. Silver's volatility index reaching historic levels and price swings from over $100 to the $80s demonstrate the speculative nature of its participant base, making it unsuitable for defensive positioning.

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