Silver prices soar to $64.6, reaching a new high. How should Taiwanese retail investors get on board? Silver ETF Beginner's Guide

Silver prices have recently skyrocketed. London spot silver broke through the psychological level of $60/oz, then surged further to a historic high of $64.6/oz, with this wave of gains far exceeding market expectations.

Why is silver rising so aggressively?

Expectations of Federal Reserve rate cuts, ongoing tight global silver supply, and the inclusion of silver on the US critical minerals list have combined to ignite investor enthusiasm. The numbers tell the story: since the beginning of this year, silver prices have increased by over 100%, easily outpacing gold’s nearly 70% rise and crushing the Nasdaq Composite index’s approximately 20%.

Swiss international investment bank UBS even raised its 2026 target price for silver to $58–$60 per ounce, hinting at the possibility of further upward movement toward $65/oz.

Why has silver ETF become the mainstream choice?

There are several ways to invest in silver prices, but why are silver ETFs most attractive to retail investors? It’s simple—you can profit from silver without ever touching physical silver.

Silver ETFs essentially track the price of silver. They do so by holding physical silver or futures contracts, allowing you to participate in silver price movements without the hassle of storing physical bars. Buying and selling is as simple as trading stocks—just open a brokerage account and tap your app.

Physical silver may sound secure, but reality hits hard:

• High storage costs: Renting safety deposit boxes or warehouse fees annually eat up 1–5% of your returns.
• Large bid-ask spreads: Premiums at jewelry shops or precious metals dealers, plus assay fees, are hidden costs—buying at a 5–6% premium can wipe out gains.
• Poor liquidity: When you need cash quickly, physical silver is hard to liquidate promptly, and buyback prices are often opaque.
• Transport and verification hassles: Moving large amounts of silver and verifying authenticity are additional burdens.

In contrast, silver ETFs solve these pain points. You hold a financial product, not physical silver, saving all physical management costs. Liquidity far surpasses that of physical silver, allowing you to buy or sell at will.

How do silver ETFs work? What are the risks?

Silver ETFs generally operate in two ways:

Method 1: Direct holding of physical silver
The fund purchases physical silver bars stored in vaults. If silver rises 5%, the ETF value also rises 5%; if silver falls, the ETF drops accordingly. This is the most straightforward approach, but annual management fees can eat into your gains.

Method 2: Using futures and derivatives
Instead of holding physical silver, the ETF tracks silver prices via COMEX silver futures or other financial instruments. This method offers higher flexibility but involves handling futures rollovers, which can sometimes cause long-term returns to lag behind actual silver prices.

A key reminder: Silver’s price volatility is much fiercer than gold’s. Although 2025 saw a 100% surge, silver has historically experienced sharp corrections, and short-term losses can be substantial. Investors with low risk tolerance should think carefully.

What options do Taiwanese investors have for buying silver ETFs?

Popular global silver ETFs include:

SLV (iShares Silver Trust)
The most well-known silver ETF worldwide, managed by BlackRock, with assets over $30 billion. It directly holds physical silver, tracking London spot silver prices, with an annual fee of just 0.50%. Due to passive management, it rarely trades frequently, only periodically selling small amounts of silver to cover operational costs. Ideal for investors seeking pure silver exposure.

DBS (Invesco DB Silver Fund)
Tracks silver prices via COMEX futures, with a 0.75% annual fee. Futures-based, suitable for investors wanting more flexibility, but watch out for rollover costs.

AGQ (ProShares Ultra Silver)
This one is special—it offers 2x leverage. If silver rises 5%, AGQ jumps 10%; if silver drops 5%, AGQ falls 10%. High leverage amplifies gains but also magnifies losses. Only suitable for experienced short-term traders; long-term holding can erode returns due to compounding decay.

ZSL (ProShares UltraShort Silver)
A 2x inverse leveraged ETF, betting against silver. When silver prices fall, ZSL rises; when silver rises, ZSL falls. Only for short-term trading; long-term holding carries significant risk.

PSLV (Sprott Physical Silver Trust)
Launched in 2010, with assets around $12 billion. Notably, investors can exchange shares for physical silver. Unlike typical ETFs, it doesn’t continuously issue or redeem units, so its trading price can deviate from net asset value, sometimes at a premium or discount. Suitable for long-term investors aware of price spreads.

00738U (Fubon Silver Futures ETF)
A Taiwan-listed silver ETF investing in Dow Jones Silver ER futures. Annual fee of 1%, categorized as a high-volatility product. Its advantage is listing in Taiwan, with simple tax treatment (tax-exempt on purchase, 0.1% on sale), but tracking error can be larger.

SLVP (iShares MSCI Global Silver and Metals Miners)
This ETF doesn’t track silver prices directly but invests in major global silver mining companies. When silver prices rise, mining stocks often outperform silver itself—2025 saw a 142% increase, far exceeding silver’s 100%. However, it’s more volatile, influenced by company operations, policies, and costs, with larger bid-ask spreads.

How can Taiwanese investors buy silver ETFs?

Method 1: Using a discretionary trust (most common)
Through Taiwanese brokers (Fubon, Cathay, Yuanta, Fubon, etc.), entrust foreign brokers to trade on your behalf. Steps: open a discretionary account → choose TWD or USD settlement → search ETF code (e.g., SLV) in the app → place order.

Advantages: regulated by Taiwan’s financial authorities, tax handled by the broker, funds stay in Taiwan, Chinese interface.
Disadvantages: higher fees, limited tradable products.

Method 2: Opening an overseas broker account directly
Platforms like Interactive Brokers, Fidelity, etc. Apply online with passport, ID, proof of address. Steps: open account → wire transfer (TWD to USD) → place trades directly.

Advantages: very low or zero commissions, access to global markets, advanced tools.
Disadvantages: interface in English, handling remittances and taxes yourself (US withholding tax on dividends at 30%), less legal protection in disputes.

Do I need to pay tax when buying silver ETFs?

A crucial detail affecting your net returns.

Taiwan-listed silver ETFs (e.g., 00738U):
Treated like Taiwan stocks—buying is tax-exempt, selling incurs a 0.1% tax. Simplest.

Overseas silver ETFs (e.g., SLV):
Regarded as overseas property transactions, included in overseas income. The key thresholds are:

• Total overseas income ≤ NT$1 million per year → not included in minimum tax base
• Total overseas income > NT$1 million → all included in taxable income

Exceeding NT$1 million, 20% tax applies to the excess. For example, if total overseas income is NT$1.5 million, the NT$0.5 million over the threshold is taxed at 20%, resulting in NT$100,000 tax.

This means that if you make big short-term gains from silver ETFs, tax costs should not be overlooked.

Silver ETF vs other silver investment methods

There are many ways to invest in silver, each with pros and cons:

Physical silver bars
Gain about 103% (tracking silver price), but after deducting 5–6% premium, 1–5% annual storage fee, and assay costs upon sale, net returns are roughly 95–100%. Suitable for those extremely bullish on long-term silver and not concerned about liquidity.

Silver futures
If correct on the trend, 2x leverage can yield over 200% profit. But risks are amplified—wrong direction means similar magnitude loss, potentially wiping out capital. Only for experienced traders.

Silver mining stocks (e.g., SIL)
Mining companies often see profits magnified when silver prices rise, so their gains can exceed silver’s own increase. In 2025, mining ETFs rose 142%, far surpassing silver’s 100%. But they are more affected by company management, policies, costs, and geopolitical factors, with higher volatility and individual stock risks.

Silver ETFs
Returns are slightly lower than silver’s price (due to fees), but they are easiest to buy/sell, most liquid, require no storage, and have manageable risks—ideal for beginners. After 2025, net returns after fees are about 95–100%.

Five major risks of investing in silver ETFs

1. Silver’s extreme volatility
Silver historically fluctuates much more than gold or stocks. Although 2025 saw a 100% surge, it has also experienced short-term drops of 30–40%. Investors need strong nerves.

2. Tracking errors are unavoidable
Futures-based ETFs may underperform due to rollover costs; physical ETFs’ annual fees gradually erode gains. Always check expense ratios.

3. Currency risk
Overseas ETFs are affected by USD/TWD exchange rates. Silver prices rise, but if USD weakens against TWD, your actual returns diminish.

4. Geopolitical and demand uncertainties
Silver prices are influenced by industrial demand (solar, electronics, medical), geopolitical tensions, and monetary policies. These factors change rapidly and are hard to predict.

5. Leverage products carry hidden risks
AGQ, ZSL, and similar leveraged ETFs reset daily. Long-term holding can lead to decay due to compounding, causing returns to lag behind expectations. These are suitable only for short-term trading.

Final advice

Silver ETFs are excellent tools to participate in silver price gains, especially for Taiwanese investors who prefer not to deal with physical delivery. But don’t expect to get rich overnight—silver’s volatility demands mental preparedness.

Before investing, ask yourself three questions:

1. How much short-term loss can I tolerate? Silver can suddenly retrace 20–30%. Can you handle that?
2. What is my investment horizon? Short-term speculation and long-term holding require different ETF choices.
3. Have I calculated all costs? Discretionary trust fees, overseas taxes, currency costs—do they justify the potential gains?

Understanding these, combined with your risk appetite and capital, will help you choose suitable channels and ETFs. Diversify, review regularly, and avoid putting all your chips into a single product—that’s the right way to invest in silver ETFs.