Is Silver a Good Investment in Australia?
Thinking about investing in silver in Australia? An honest look at the pros, cons, how to buy it, the tax, and whether it suits your portfolio.
By Timothy Hirou GaschereauPublished 8 min read
Silver has a certain appeal. It is shiny, tangible, historically used as money, and costs a fraction of gold per ounce. But appealing and right for your portfolio are two different things. The honest answer is that silver can play a useful role as a small diversifier or inflation hedge, but it is more volatile than most mainstream assets, pays no income, and comes with storage and tax quirks that are easy to overlook.
This guide covers the pros, the cons, how to actually buy silver in Australia, the tax, and how it stacks up against gold.
🎯 The essential: Silver can work as a small diversifier or inflation hedge, but it is volatile and pays no income. Industrial demand (solar, EVs, electronics) gives it a driver gold does not have. Investment-grade silver (99.9% pure) is GST-free in Australia, and selling at a profit triggers CGT with a 50% discount if you hold for over 12 months. You can buy it via physical bullion, an ASX ETF (ETPMAG), or silver mining shares. It suits investors who already have a diversified core and want a small, long-term satellite, not a starting point.
The short answer
Silver is not a core investment. It pays no dividends or interest, and its price can swing sharply both ways. Over the long run it has broadly preserved purchasing power, but it has also had long flat or falling stretches. That said, it has a 5,000-year track record as a store of value, real industrial demand underpinning it, and it lets you hold a physical asset outside the banking system. The key word is "small": if silver belongs in a portfolio at all, it belongs as a satellite, not a centrepiece.
Why people invest in silver
- Store of value and inflation hedge. Like gold, silver has been money for millennia and tends to hold value over long periods when inflation erodes cash.
- Industrial demand. Roughly half of silver demand is industrial. It is an exceptional conductor, essential in solar panels, EV batteries, semiconductors and electronics, so the energy transition is a real demand tailwind that gold lacks.
- Cheaper entry than gold. Gold trades at roughly 80 to 90 times the price of silver per ounce, making silver accessible without the cost of a gold bar.
- Diversification. Silver has a low long-term correlation with shares and bonds, so a small allocation can, in theory, reduce overall volatility.
The risks and downsides
- High volatility. Silver moves more sharply than gold. In a downturn it can fall 30 to 40% quickly; in a bull run it can spike just as fast.
- No income. Physical silver and silver ETFs pay nothing. If the price goes sideways for five years, you earn nothing.
- Storage and insurance. Bars and coins need safe storage. Home storage risks theft; vault storage typically costs 0.5 to 1% of value a year, plus insurance.
- GST on non-investment-grade silver. Investment-grade (99.9% pure) is GST-free, but collectible coins may attract 10% GST, which immediately lifts your cost base.
- Liquidity. Silver is less liquid than gold, and selling physical metal quickly at a fair price can be harder outside major cities.
Ways to invest in silver in Australia
There are three practical routes for Australian investors.
Physical bullion. Buy bars and coins outright from a reputable dealer like the Perth Mint. You own it directly (no counterparty risk), but you take on storage and insurance.
A silver ETF on the ASX. ETPMAG (ETF Securities Physical Silver, ASX: ETPMAG) tracks the silver spot price and holds physical silver in custody for you. You buy and sell it like a share, with no storage hassle. Brokerage and a small annual fee apply. If you already buy ETFs, this is the simplest path. Our best ETFs guide explains how ETFs work.
Silver mining shares. Shares in silver miners (like Silver Mines, ASX: SVL) are leveraged to the silver price: they can rise more when silver rises and fall harder when it drops, plus you take on company-specific risk. Higher risk, higher complexity.
| Method | How it works | Ongoing cost | Best for |
|---|---|---|---|
| Physical bullion | Hold bars and coins directly | Storage and insurance (~0.5 to 1%) | Direct ownership, no counterparty risk |
| Silver ETF (ETPMAG) | ASX fund tracking the silver price | ~0.49% p.a. plus brokerage | Simple price exposure via a broker |
| Silver mining shares | Shares in ASX silver miners | Standard brokerage | Comfortable with company risk and volatility |
Gold vs silver: what is the difference?
Both are precious metals, but they behave differently. Gold is primarily a monetary metal, with about 90% of demand from jewellery, investment and central bank reserves, and it tends to be more stable. Silver is both monetary and industrial, which gives it more upside in a booming economy and more downside in a recession.
The gold-silver ratio (the gold price divided by the silver price) has historically ranged from about 50 to 80. A high ratio means silver is historically cheap relative to gold, which some investors use as a rough context check (not a guarantee). For the other side of the coin, see our guide to investing in gold in Australia.
Tax on silver in Australia: CGT and GST
Capital gains tax. Silver is a CGT asset. Sell at a profit and the gain is included in your taxable income; hold for more than 12 months and individuals get the 50% CGT discount. Capital losses can offset other capital gains. Keep records of your purchase price, date and costs.
GST. Investment-grade silver (at least 99.9% pure, in bar, ingot or coin form) is GST-free under ATO rules. Collectible or numismatic coins may attract GST, adding 10% to your cost base. Confirm the GST status with the seller before buying.
How much silver should be in a portfolio?
The short answer: not much, if any. Silver is a satellite holding. Most diversification frameworks keep speculative or alternative assets (gold, silver, crypto, commodities) to no more than 5 to 10% of a portfolio in total, so silver alone might be 1 to 3%. It does not generate income or compound, and its long-term real returns are modest versus a diversified share portfolio. If you are still building your core, start there first with a low-cost, diversified ETF base. See our best ETFs guide.
So, is silver right for you?
Silver may suit you if: you already have a diversified core (shares, ETFs, super) and want a small alternative position, you are comfortable with big price swings, you want a long-term store of value rather than income, and your horizon is five years or more.
It probably does not suit you if: you are just starting out and have not built a core yet, you need regular income, you may need the money within two years, or a 30% drop would make you panic-sell. If you are ready to invest more broadly, how to buy shares in Australia is a good next step.
Silver is a satellite, not a starting point. It has a real industrial demand story that gold lacks, but it pays no income and swings hard. If it earns a place at all, keep it to a small slice (often 1 to 3%) of an already diversified portfolio, and remember investment-grade silver is GST-free while gains are still subject to CGT.
❓ Frequently asked questions
Is silver a good investment right now?
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Silver's price is driven by industrial demand, inflation expectations and the strength of the US dollar. Rather than trying to time the market, most investors treat silver as a small, long-term diversifier. Whether now is the right time depends on your situation, your existing portfolio and your goals, not just the current spot price.
Is silver better than gold as an investment?
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Neither is universally better. Gold is more stable and widely held as a monetary asset. Silver is cheaper per ounce, more volatile, and has stronger industrial demand drivers, particularly from the clean energy sector. Some investors hold both in small amounts as part of a broader diversification strategy.
Do you pay GST on silver in Australia?
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Investment-grade silver (at least 99.9% pure, in bar or coin form) is GST-free under ATO rules. Collectible or numismatic coins, valued for rarity rather than metal content, may attract GST. Always confirm the GST status with the seller before buying, or check with a registered tax agent.
How do I buy physical silver in Australia?
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The Perth Mint is the most reputable source for physical silver in Australia, with a range of bars and coins. Private dealers and online bullion platforms also sell it. Buy from a reputable, government-backed or LBMA-recognised source, and factor in secure storage and insurance before committing.
Is there a silver ETF on the ASX?
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Yes. ETPMAG (ETF Securities Physical Silver) trades on the ASX and tracks the silver spot price, holding physical silver in custody. You get price exposure without arranging your own storage, buying and selling like a share. Standard brokerage and a small annual fee apply.
Does silver pay dividends?
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No. Physical silver and silver ETFs pay no dividends or interest, so your only return is price appreciation. Silver mining shares may pay dividends, but that depends on the individual company's profitability and policy, and is not guaranteed.
Keep reading
Sources
This article is general information only, not financial or tax advice. It does not take into account your circumstances. Prices, fees and tax rules change over time, and figures here are indicative as of mid-2026. Check the Perth Mint, the ATO, or a licensed adviser before acting. Past performance is not a reliable indicator of future performance.
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Explore the calculators →General information only. This article is educational and does not constitute personal financial advice. It does not account for your circumstances. Consider your own situation and seek advice from a licensed adviser before acting. Read our full disclaimer.
Timothy Hirou Gaschereau
Founder of Snowball Invest, not a financial adviser.
I write about what I'm learning myself, because nobody ever taught us how to take control of our own money. It's a skill, not a mystery, and it's never too late to learn it. The best day to start was yesterday, the second best is today.
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