I think diversifying between silver and gold (and possibly other precious metals/commodities as well is a sound move, compared to just keeping one. There are infinite variables that can affect future price developments.
Personally, I have two concerns about gold. These are:
- A shift away from traditionalism to westernism/modernism in India could severely impact demand for gold. The requirement for bringing gold into a marriage has long been a major driver in the demand for gold, and a move away from traditional Indian values could greatly reduce that.
- Part of the demand for gold by central banks could hypothetically be replaced by central bank digital currencies and possibly tokenized securities.
I don’t see those things happening in the very near future, but I see them as realistic enough possibilities to warrant some diversification to other commodities.
With regards to using ETFs to invest in precious metals, I think it’s important to do the math. If you plan to hold your investments long term, buying physical bullion can work out cheaper, in spite of the bigger spreads and other costs.
Example:
Buying and holding a 1kg gold bar for 10 years, assuming 3% total markup/markdown on the spot price (CHF 83,767) at buy and sell: CHF 2513 (CHF 3013 if rent a safe deposit box for CHF 50 per year).
Cost of holding CHF 83,767, in the ZKB Gold ETF A with a 0.40% TER for 10 years: CHF 3285.
Of course, this is a simplified calculation based on the assumption that doesn’t account for price growth. But it does show why using ETFs for things like precious metals, bitcoin, etc. doesn’t always make sense.