Silver price surge unstoppable! Should Taiwanese retail investors follow the trend? Understand the new silver price high and ETF investment in five minutes

Why This Time Silver Prices Are Truly Different

In 2025, silver prices once again made history, officially breaking through $60 per ounce on December 9th, and then soaring to an astonishing high of $64.6. How fierce is this surge? Silver prices have skyrocketed over 100% this year, outpacing gold’s increase by more than 60%, and far exceeding the 20% rise of the Nasdaq index.

The supporting factors behind this rally are certainly not unfounded. Expectations of Federal Reserve rate cuts have triggered a global weakening of currencies, increasing silver’s appeal as an inflation hedge; worldwide silver supply remains tight, and the US has officially included silver in its list of strategic critical minerals, further enhancing its strategic value. International investment bank UBS is optimistic about the future, raising the target price for silver in 2026 to the $58–$60 range, and even not ruling out the possibility of soaring to $65.

Faced with such a market, many retail investors in Taiwan are eager to jump in, but should they choose physical silver bars or financial instruments? This is the core question this article aims to answer.

Why Silver ETFs Have Become the First Choice for Retail Investors

Silver ETFs fundamentally are investment funds that track the price of silver. Unlike other traditional investment methods, investors buying silver ETFs do not need to physically own silver; they can simply use a brokerage account to buy and sell, just like trading stocks.

The operation logic of silver ETFs is relatively simple—fund management companies usually hold physical silver bars directly or use derivatives like silver futures contracts linked to silver prices to replicate market returns. When silver prices rise by 5%, the ETF’s net asset value (NAV) also increases by about 5%; conversely, it decreases when prices fall. This close linkage allows investors to precisely capture silver price fluctuations.

Why are silver ETFs more attractive than physical silver for retail investors? Considering the storage and security costs of physical silver (annual safe deposit box fees of 1–5%, insurance costs, oxidation and discoloration issues, theft risks), as well as the inconvenience of verifying authenticity at silver shops and paying 5–6% bid-ask spreads, silver ETFs convert these hassles into the convenience of financial products—eliminating the burden of transportation and storage, while still closely tracking silver prices with higher liquidity than physical silver.

How to Choose Between Taiwan and Overseas Silver ETFs

Common silver ETFs on the market generally fall into two categories: local products listed on the Taiwan Stock Exchange, and international funds traded on overseas exchanges. The former includes Qian Yuan Da Dao Qiong Silver (00738U), which tracks the Dow Jones Silver Excess Return Index via COMEX silver futures contracts, with an expense ratio of 1%, and is rated as high volatility. Its advantages include simplified trading taxes (0.1% tax on selling), and no need to transfer funds abroad.

In the international market, SLV (iShares Silver Trust) is the most well-known silver ETF globally, managed by BlackRock, with over $30 billion in assets, and an annual fee of only 0.5%. Launched in 2006, it has continuously held physical silver and since August 2014, tracks the LBMA silver benchmark price. Due to its passive management strategy, the fund does not trade frequently to chase volatility, only periodically selling small amounts of silver to cover operational costs.

For investors seeking short-term trading opportunities, AGQ (ProShares Ultra Silver) offers 2x leverage, and ZSL (ProShares UltraShort Silver) provides 2x inverse leverage. However, both are only suitable for short-term trading, as long-term holding can erode returns due to compounding decay.

PSLV (Sprott Physical Silver Trust), launched in 2010, is a closed-end fund allowing investors to redeem physical silver, attracting long-term holders, with assets under management reaching $12 billion. Since its trading price is determined by market supply and demand rather than daily NAV, it often trades at a premium or discount, which investors should be aware of.

SLVP (iShares MSCI Global Silver and Metals Miners) takes a different approach—investing in stocks of major silver exploration and mining companies rather than directly holding silver. Although its management fee of 0.39% is below the industry median, its performance tends to be more volatile, with tracking errors, frequent component adjustments, and wider bid-ask spreads, making its returns less attractive.

How Do Taiwan and Overseas Investors Access Silver ETFs?

Cross-trading via securities firms is currently the main way for Taiwanese investors to buy international silver ETFs. Through domestic brokers (such as Fubon, Cathay, Yuanta, Yuanta, etc.), investors can place orders with overseas brokers, completing the entire process in Chinese, without needing to transfer funds abroad, and under the supervision of the Financial Supervisory Commission. Tax issues are handled by the broker. The downside is higher transaction fees and limited ETF options.

Opening an overseas brokerage account directly is another route. Investors can open accounts online with international brokers, providing passport, ID, proof of address, and bank details. This allows trading any listed ETF globally at very low commissions (many are commission-free or with low fixed fees). Benefits include faster transactions, a wide range of products, and support for advanced tools like options and margin trading. The drawbacks are handling English interfaces, remittance/foreign exchange, and paying US withholding tax (usually 30%) and personal income tax filings. There is also limited legal protection in Taiwan for funds in overseas accounts.

Important Tax Considerations

Tax burdens for Taiwanese investors buying silver ETFs depend on the listing location.

Buying Taiwan-listed silver ETFs (like Qian Yuan Da Dao Qiong Silver) is treated similarly to Taiwan stocks—most straightforward: buying is tax-free, and selling incurs a 0.1% tax.

Buying overseas silver ETFs is more complex. Profits are considered overseas property transaction income, included in overseas income. There is a key exemption threshold: if total overseas income ≤ 1 million TWD annually, it is exempt from minimum tax calculation; exceeding this amount, the excess is fully included in the basic income calculation. For example, if annual overseas income is 1.2 million TWD, the 200,000 TWD over the threshold is included in the basic income, which after deducting the 7.5 million TWD exemption, is taxed at 20%.

This overseas income exemption means that if investors’ total overseas investment gains stay below 1 million TWD annually, tax burdens are relatively light; but if silver prices surge and profits exceed this, they must actively declare and pay the basic tax.

Comparing Returns and Risks: Silver ETFs vs. Other Investment Methods

Looking at actual performance in 2025, silver futures, due to leverage, achieved or exceeded 200% returns (using 2x leverage), but risks are amplified—if the market moves against expectations, losses can also multiply, potentially wiping out the principal.

Mining stocks (like those represented by SLVP) gained about 142%, surpassing the roughly 100% return of pure silver ETFs, but they are not directly exposed to silver prices alone. Their performance depends on company operations, government regulations, mining costs, and other factors, with higher volatility and risk.

In comparison, silver ETFs, while offering slightly lower returns (after fees, slightly below silver price gains), have advantages such as no storage costs, lower fees, and more manageable risks—making them more suitable for beginners and small-cap investors to quickly enter and exit the market. Physical silver bars, due to storage costs and liquidity issues, may yield net returns of about 95–100%, which might be less than ETFs, and are better suited for long-term holding with insured vaults.

Risks of Investing in Silver ETFs Cannot Be Ignored

Silver prices are far more volatile than gold and stocks. Although the 2025 surge exceeded 100%, history shows frequent sharp corrections, and short-term declines can be substantial, making it more suitable for high-risk tolerance investors.

Tracking errors are also a concern. Futures-based ETFs are affected by roll costs, which can cause long-term returns to lag behind spot prices; physical ETFs, while more accurate, incur annual fees of 0.4–0.5% that gradually erode gains. Overseas ETF investors also face currency risk and tax reporting burdens.

Furthermore, silver prices are influenced by geopolitical events, industrial demand (solar energy, electronics manufacturing), and global monetary policies, making short-term predictions difficult.

Investment Advice for Taiwanese Retail Investors

Silver ETFs can serve as an effective tool for precious metal asset allocation, especially for those wanting to participate in silver price movements without the costs of physical storage. However, investors must recognize that silver prices are highly volatile and susceptible to speculative sentiment, with significant differences among ETFs in management fees, tracking methods, and leverage.

A diversified approach is recommended—avoiding over-concentration in a single product, regularly reviewing market changes and positions, and choosing based on risk tolerance. For low-cost, passive exposure, ETFs like SLV are suitable, while leveraged products like AGQ are for more aggressive traders. If complex overseas tax reporting is a concern, the Taiwan-listed Qian Yuan Da Dao Qiong Silver, despite slightly higher fees, offers simpler tax handling and remains a good alternative.