Silver was more volatile than gold because it is a smaller market. – William L. Silber, “The Story of Silver: How the White Metal Shaped America and the Modern World”
Silver was more volatile than gold because it is a smaller market.
Silver ended 2025 with a sharp rally, rising from just over $46 an ounce at the end of the third quarter to more than $71 by year-end. The precious metal has a history of powerful moves often dismissed as speculative, even when they coincide with broader shifts in trust and capital allocation. When confidence in institutions erodes, the adjustment shows up quietly in portfolio behavior rather than in volatility spikes or sudden regime breaks.
The chart above shows the ratio of silver to the S&P 500 Index, highlighting how capital preferences between real assets and financial claims shift across regimes. Long stretches of equity dominance reflect trust and liquidity. According to industry estimates, the total above-ground value of gold is roughly 10 times larger than silver’s, helping explain why shifts in capital allocation produce more extreme price moves in silver.
From the early 1990s through the mid-2000s, the silver-equities ratio was relatively range-bound. Neither asset held a clear advantage, reflecting a period characterized by declining interest rates, expanding globalization and strong confidence in U.S.-led financial institutions. During episodes of institutional stress, most notably the Global Financial Crisis, that balance shifted, with silver and other precious metals outperforming equities on a relative basis. The following decade reversed that dynamic as financialization, falling discount rates and supportive policy favored equity markets.
What makes the current period interesting is not silver’s rise, but its renewed relevance in portfolios. As discussed previously when examining the S&P 500 in gold terms, relative performance between financial and real assets often shifts when confidence weakens in monetary and fiscal frameworks. That December 2024 analysis focused on purchasing power and valuation. This chart captures something different: portfolio adaptation.
Investors are not fleeing risk wholesale but rotating toward assets that are difficult to confiscate, freeze or politically impair alongside traditional allocations. Gold has played this role at the official level through reserve diversification. Private portfolios adapt less uniformly, rotating unevenly across assets that sit outside the financial system rather than abandoning it.
Silver occupies an unusual position in this process, combining monetary characteristics with real-world utility. Industrial usage tied to electrification and infrastructure provides a parallel source of demand for silver, complementing portfolio flows without acting as the primary catalyst for recent price action.
Importantly, this is not a straight-line process. Capital tends to move sequentially across alternative assets rather than all at once. It rotates. Gold, digital assets including bitcoin and silver have each taken turns reflecting this behavior. Periods of consolidation and reversal should be expected. The chart does not suggest inevitability, only optionality.
Looking ahead to 2026, the implication is not that equities must underperform or that silver will continue rising uninterrupted. The more important takeaway is that portfolio construction is changing in a world where institutional trust can no longer be assumed reliably. In such an environment, real assets regain relevance not as trades but as insurance.
When trust erodes, portfolios adjust quietly. Ratios change before narratives do.
Between the Lines is a weekly blog by DoubleLine Portfolio Managers Sam Garza, Joseph Mezyk and Quant Analysts Fei He, CFA and Sunyu Wang that breaks down topical macro and market issues. For questions or suggestions please e-mail us at betweenthelines@doubleline.com. The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of DoubleLine Capital LP, its affiliates or employees.
