Silver prices break records: How Taiwanese retail investors are positioning in silver assets? The investment opportunities behind the soaring price of pure silver at a quarter ounce

London spot silver is currently experiencing an unprecedented surge. In early December 2025, silver prices broke through the $60 per ounce mark, then soared to a new all-time high of $64.6/oz, creating the most impressive performance of the year. This rally is driven by expectations of Federal Reserve rate cuts, tightening global silver supply, and the U.S. officially including silver in the critical minerals list, among other positive factors.

Based on annual performance, silver has increased by over 100%, far surpassing gold by more than 60% and also outperforming the Nasdaq Composite Index by about 20%. International investment bank UBS is optimistic about the future, raising its target price for silver in 2026 to $58–$60 per ounce, and even not ruling out a challenge to $65/oz. How should retail investors in Taiwan participate in this market?

The Three Main Ways to Invest in Silver: Understanding Their Pros and Cons

For those wanting to participate in silver investment, there are generally three options. Traditional physical silver bars are the most straightforward, but face issues such as storage costs (annual fee 1-5%), theft risk, and low liquidity, with buy-sell spreads of 5-6%, making it less ideal. Futures contracts offer high leverage and potentially astonishing returns but come with significant risks and complex monitoring costs. In contrast, Silver ETFs have emerged as a convenient and safe middle ground.

Silver ETFs are investment funds that track silver prices without requiring investors to store physical silver themselves. They replicate the market performance through physical reserves or derivatives like futures contracts. Investors can buy and sell on exchanges as easily as stocks, with much higher liquidity than physical trading. Over the year, the returns of silver ETFs are slightly lower than futures (which can reach over 200%), but their risk levels are much lower, making them more suitable for beginners and small investors with limited risk tolerance.

Overview of the Seven Major Silver ETFs Globally: Choosing Wisely

Currently, the most prominent silver ETFs in the international market include:

SLV (iShares Silver Trust) is the largest and most well-known silver ETF worldwide, managed by BlackRock, with assets exceeding $30 billion. Launched in 2006, it holds physical silver in a pure form, with custodial safety ensured. Its passive management ensures accurate tracking, with a fee of only 0.50%. Suitable for conservative investors seeking stable, long-term participation in silver price increases.

DBS (Invesco DB Silver Fund) tracks silver prices via COMEX futures, with a fee of 0.75%, suitable for investors with basic knowledge of futures markets.

AGQ (ProShares Ultra Silver) offers 2x leverage, aiming to double the daily return of silver. Due to compounding erosion and rollover costs, it is only suitable for short-term speculation. Fee: 0.95%.

ZSL (ProShares UltraShort Silver) provides 2x inverse leverage, used for hedging or shorting silver, also only for short-term trading. Fee: 0.95%.

PSLV (Sprott Physical Silver Trust) launched in 2010, with about $12 billion in assets. Its feature is that investors can redeem physical silver upon request. It has a closed-end structure, with market prices often at a premium or discount, and a fee of 0.62%. Suitable for institutional and large investors with a long-term bullish outlook on silver.

SLVP (iShares MSCI Global Silver and Metals Miners) invests in global silver mining companies, tracking a mining index, with a fee of only 0.39%. Its 2025 performance reached 142%, exceeding silver price gains, but with higher risk due to company operational risks and more volatility.

Taiwan’s TAIEX Silver ETF (00738U) is listed in Taiwan, tracking the Dow Jones Silver ER Index, with a fee of 1%, implemented via COMEX futures, positioned as a high-volatility product.

How Taiwanese Investors Can Enter: Discretionary Trading vs. Overseas Brokers

For Taiwanese retail investors, there are mainly two ways to buy overseas silver ETFs.

Discretionary Trading (DCA) is the preferred choice for most beginners. By opening accounts with domestic brokers (Fubon, Cathay, Yuanta, Mega, etc.), investors can delegate trading to them. The process is simple, regulated by the Financial Supervisory Commission, with comprehensive tax support. Investors can choose TWD or foreign currency settlement. Many broker apps support regular fixed investments, suitable for small-scale accumulation. The downside is higher transaction fees and limited available products.

Opening accounts directly with overseas brokers offers lower costs and more diverse products. Investors can open accounts online with overseas brokers by preparing their passport, ID, proof of address, and bank info—no physical visit needed. After transferring funds via wire transfer, they can trade immediately. Many charge zero or fixed transaction fees, with faster execution. The drawbacks include interfaces mostly in English, currency exchange involved in remittances, U.S. dividend withholding tax of 30% that must be self-reported for tax refunds, and potential concerns over fund security and inheritance issues.

Tax Implications: Significant Differences Between Taiwan and Overseas

Tax burdens depend on where the ETF is listed.

Taiwan-listed silver ETFs (like the TAIEX Silver ETF) are treated similarly to Taiwan stocks, making trading straightforward. No tax on purchase; a 0.1% securities transaction tax applies upon sale, very light.

Overseas-listed silver ETFs (such as SLV, AGQ) are considered foreign property transactions, included in overseas income. The key threshold is NT$1 million: if total overseas income in a year is ≤ NT$1 million, it is exempt from minimum tax; exceeding NT$1 million means the full amount is included in taxable income. The tax rate is 20% on the basic income exceeding the NT$7.5 million exemption. Additionally, if the ETF pays dividends, the U.S. will withhold 30%, which investors must declare and reclaim via tax refund. However, most silver ETFs do not pay dividends, so this cost is minimal.

Comparing Actual Returns of Silver ETFs and Other Investment Methods

A comparison of five investment options: silver ETFs, physical silver bars, futures, mining stocks, and silver CFDs:

Physical silver bars: Actual ownership with no counterparty risk, but storage costs 1-5% annually, buy-sell premiums of 5-6%, and poor liquidity. Estimated 2025 return: about 95-100% (silver price increase of 103% minus costs).

Silver futures: High leverage, potentially over 200% returns with correct operation, but with amplified risks—losses can wipe out the entire investment. Requires monitoring expiry, rollover details, and margin requirements.

Silver ETFs: Easy to buy and sell, high liquidity, no storage risk, but long-term returns are eroded by fees and tracking errors. Returns roughly equal to silver price minus annual fees (0.4-0.95%), with a net 2025 return of about 99%. Best suited for beginners and small investors.

Silver mining stocks: More volatile than silver prices due to company operations and cost fluctuations. The 2025 mining ETF (like SIL) returned 142%, outperforming silver price gains, but with higher risk.

Silver CFDs: Convenient trading, supports leverage and shorting, requires little capital, with low fees. Returns depend on leverage and trading direction, suitable for experienced short-term traders.

Three Major Risks Investors Should Watch for Behind Silver Price Highs

Although silver ETFs are attractive, investors should be aware of these risks:

Silver price volatility far exceeds gold and stocks. Despite the impressive gains in 2025, history shows sharp corrections can occur, leading to significant short-term losses. Not suitable for low-risk tolerance investors holding long-term.

Tracking errors are unavoidable. Futures-based ETFs are affected by rollover costs, often underperforming spot prices over the long term; physical ETFs have higher accuracy but incur annual fees of 0.4-0.5%, gradually eroding returns. Leveraged ETFs suffer from compounding decay, which can lead to losses over time.

Foreign investment involves exchange rate and tax variables. Silver prices are influenced by geopolitical factors, industrial demand (solar, electronics, medical), and global liquidity. Currency fluctuations may offset gains. For overseas ETFs exceeding NT$1 million in income, tax costs are also a concern.

Conclusion: Who Is Silver ETF Suitable For?

From an asset allocation perspective, silver ETFs provide an effective tool for precious metal investment. For Taiwanese retail investors, they eliminate the hassle of physical storage while offering liquidity and trading convenience. Conservative investors should consider physical-backed ETFs like SLV with low fees for long-term holding; advanced investors might explore PSLV’s physical redemption feature or SLVP’s leverage on mining stocks; short-term traders can target AGQ or ZSL to seize market swings.

Regardless, silver prices are highly volatile, and market sentiment is speculative. Diversification, avoiding over-concentration in a single product, and regular review of positions are recommended. Combining discretionary trading with overseas brokers can balance costs and convenience, making smart silver investment strategies.