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HomepageInsights & ResearchThe global love affair with precious metals
Why are traditional Valentine's Day gifts like jewelry made of gold, silver, platinum, or palladium?

Because these metals are brilliant when polished and long lasting as they are difficult to mark and tarnish.

  • Gold has long been a gift, a symbol of royalty and lasting love. One of the earliest known pieces of gold jewelry was found off the coast of Bulgaria and dated from 4,300 BC – making it nearly 6,300 years old.1 By comparison, the longest-lasting marriage is between Herbert and Zelmyra Fisher of New Bern, North Carolina, which lasted 86 years.2 Most of us are pretty safe using gold as a symbol of lasting love. Central banks certainly love gold, as their purchases in 2022 and 2023 exceeded previous records.3
  • Silver jewelry is in trend today for those who want less flash, but the oldest silver jewelry is a 5,000-year-old ring recently discovered in Oman.4 The oldest silver beads are 6,400 years old5, and silver was used as currency as much as 3,600 years ago6 in the Levant7, and as cups and plates for more practical purposes before that8. Much of today's demand for silver also comes from practical uses like industrial uses for solar panels and medical instruments. Given a choice between a silver necklace or a solar panel, most Valentine's Day gift-givers choose the jewelry.
  • Platinum and palladium are primarily used in automobile catalytic converters, subject to high heat and moisture levels, which would tarnish and corrode other metals. Word to the wise: platinum jewelry is a more romantic gift than a catalytic converter.

The use of these metals as jewelry over the millennia has proven to be a long-lasting psychological symbol of a store of value, as money, or as a symbol of love.

But even with lasting love, there are temptations. Something new, exciting, and different can distract one's current tastes. It can tempt even the most ardent investor. Take crypto, for example. It's young (introduced in 2009), it's emotional (2x the price volatility of gold), and it's tough to understand at a deeper level (virtually impossible to use as a currency, its stated use). Yet, cryptocurrencies are seemingly the talk of the town, garnering attention from some of the largest and most sophisticated investment houses. Unfortunately, if you forget your crypto wallet password your cryptocurrency won't last past Thursday, let alone 6,300 years.

Which leaves us with precious metals as symbols of romance. Precious metal deposits are difficult to locate, even more challenging to mine, and require great energy to refine, even for a skilled craftsperson to fashion into a keepsake. Small wonder it is associated with romance.

Beyond the Valentine's Day allegories, there are reasons for a positive outlook on these metals.

Heart of gold

Gold demand from central bankers may have shifted structurally higher. Central banks purchased 1,037 tons of gold last year9, just shy of the previous year's total of 1,081 tons, which was the highest since the data series began. Foreign central bank demand increases result from “a deeper malaise” amid “the West's proclivity to deploy unilateral financial sanctions,“ according to the Council of Foreign Relations.10 The interest rate cycle has been influential in the past as well. The last three times the US Federal Reserve cut interest rates in 2000, 2006, and 2018, gold rose 57%, 235%, and 70%, respectively.11

Silver springs

Silver demand is dependent on industrial activity centered in China. The use in industry, electrical components, and electronics make up the majority of demand, with sustained growth in demand from growing photovoltaic (solar panel) use.12 China produces 80% of the global solar panels, which is unlikely to change in the next few years as just one example of China-centric demand.13 Hopes of a massive Chinese economic stimulus package were dashed in 2023 as only incremental stimuli were released. Recent economic weakness and government officials have pointed toward the need for more substantial stimulus in the immediate future. China's Two Sessions14 meetings will occur March 4–5 this year. Such stimulus could increase economic and industrial activity and related demand for silver.

Precious metals' crimson and clover

Platinum and palladium use in catalytic converters make auto demand a key driver of prices, but electric vehicle (EV) adoption forecasts have become untethered to reality amid temporary growth hurdles. A recent Deloitte15 survey notes that 88% of US consumers preferred an automobile with a gasoline or hybrid gasoline/battery engine that needs a catalytic converter.16

Platinum and palladium join oil in the oversold category from our point of view. While it is true that a world full of EVs needs fewer catalytic converters and, therefore, auto catalyst metal demand may fall in the future, it is also true that higher internal combustion engine sales than forecasted would mean higher auto catalyst metal demand for platinum and palladium.

1 "6,600 Year Old Golden Pendant Discovered in Bulgaria May Be the World’s Oldest Jewelry." artnet, November 2015. https://news.artnet.com/art-world/6600-year-old-gold-pendant-bulgaria.
2 "World’s longest marriages: Secrets to a happy relationship." Guinness World Records, January 2022. https://www.guinnessworldrecords.com/news/2022/1/worlds-longest-marriages-secrets-to-a-happy-relationship.
3 "China's Gold Sales Surge As Economic Confidence Crashes." Newsweek, February 2024. https://www.newsweek.com/china-economic-woes-drive-global-gold-demand.
4 "Temple professor discovers 5,000-year-old silver jewelry in Oman." Temple Univ., February 2023. https://news.temple.edu/news/2023-02-07/temple-professor-discovers-5000-year-old-silver-jewelry-oman.
5 "Silver in Ancient Egypt." The Met, September 2018. https://www.metmuseum.org/toah/hd/silv/hd_silv.htm.
6 “Newly analyzed 3,600-year-old silver pieces are 1st currency in Levant, study shows.” The Times of Israel, January 2023 https://www.timesofisrael.com/study-claims-hoards-of-3600-year-old-cut-silver-pieces-are-first-currency-in-levant/.
7 Levant is the area in antiquity now occupied by Israel, Jordan, Lebanon, and Syria.
8 "Silverwork." Britannica. https://www.britannica.com/art/silverwork.
9 "Gold Demand Trends Full Year 2023." World Gold Council, January 2024. https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2023.
10 The Council on Foreign Relations is an American think tank for US foreign policy and international relations.
11 abrdn, Bloomberg data.
12 The Silver Institute. Silver supply & demand. https://www.silverinstitute.org/silver-supply-demand/.
13 "China will dominate solar supply chain for years – Wood Mackenzie." Reuters, November 2023. https://www.reuters.com/world/china/china-will-dominate-solar-supply-chain-years-wood-mackenzie-2023-11-07/.
14 “Two Sessions” is the collective term for the Chinese government’s annual plenary sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference.
15 Deloitte is one of the Big Four accounting firms providing global audit, consulting, financial advisory and related services.
16 Deloitte. 2024 Global Automotive Consumer Study. https://www2.deloitte.com/us/en/pages/consumer-business/articles/global-automotive-consumer-study.html.

Important information

The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. Reader should not assume that an investment in any securities and/or precious metals mentioned was or would be profitable in the future. This information is not a recommendation to buy or sell. Past performance does not guarantee future results.

Trading in commodities entails a substantial risk of loss and is not suitable for all investors.

Diversification does not eliminate the risk of experiencing investment losses.

Prospectuses for abrdn Physical Gold Shares ETF, abrdn Physical Palladium Shares ETF, abrdn Physical Platinum Shares ETF, abrdn Physical Precious Metals Basket Shares ETF and abrdn Physical Silver Shares ETF

Projections are offered as opinion and are not reflective of potential performance.

Projections are not guaranteed, and actual events or results may differ materially.

ALPS Distributors, Inc. is the marketing agent.

There are risks associated with investing including possible loss of principal.

ALPS is not affiliated with abrdn.

ETF002165 1/30/25
AA-090224-173986-1

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Investors should carefully consider a fund’s investment objectives, risks, fees, charges, and expenses before investing any money. To obtain this and other fund information, please call 866-667-9231 to request a summary prospectus and/or prospectus, or download at www.abrdn.com/us. Please read the summary prospectus and/or prospectus carefully before investing any money.

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For ETFs, please call 844-383-7289 or click here to access a prospectus online. Investing involves risk, including possible loss of principal. ETF shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund.

Important Risks

The abrdn Gold ETF Trust, abrdn Silver ETF Trust, abrdn Precious Metals Basket ETF Trust, abrdn Platinum ETF Trust and abrdn Palladium ETF Trust are not investment companies registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. Shares of the Trusts are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility.

Commodities generally are volatile and are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility. Please refer to the prospectus for complete information regarding all risks associated with the Trusts. Shares in the Trusts are not FDIC insured and may lose value and have no bank guarantee.

The value of the Shares relates directly to the value of the precious metal held by the Trust and fluctuations in the price could materially adversely affect investment in the Shares. Several factors may affect the price of precious metals, including:

A change in economic conditions, such as a recession, can adversely affect the price of the precious metal held by the Trust. Some metals are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares;

Investors’ expectations with respect to the rate of inflation;

Currency exchange rates;

Interest rates;

Investment and trading activities of hedge funds and commodity funds; and

Global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of the precious metal held by the trust or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the Shares. Should there be an increase in the level of hedge activity of the precious metal held by the Trusts or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the shares.

Also, should the speculative community take a negative view towards the precious metal held by the Trusts, it could cause a decline in prices, negatively impacting the price of the shares. There is a risk that part or all of the Trusts’ physical precious metal could be lost, damaged or stolen. Failure by the Custodian or Sub-Custodian to exercise due care in the safekeeping of the precious metal held by the Trusts could result in a loss to the Trusts.

The Trusts will not insure its precious metals and shareholders cannot be assured that the custodian will maintain adequate insurance or any insurance with respect to the precious metals held by the custodian on behalf of the Trust. Consequently, a loss may be suffered with respect to the Trust’s precious metal that is not covered by insurance.

Commodities generally are volatile and are not suitable for all investors.

Investors buy and sell shares on a secondary market (i.e., not directly from Trusts). Only market makers or "authorized participants" may trade directly with the Trusts, typically in blocks of 25k to 100k shares.

Commodities generally are volatile and are not suitable for all investors. This material must be accompanied or preceded by the prospectus. Carefully consider each Trust’s investment objectives, risk factors, and fees and expenses before investing. Please click here to review the prospectus.

ALPS Distributors, Inc. is the marketing agent for the abrdn Gold ETF Trust, abrdn Silver ETF Trust, abrdn Precious Metals Basket ETF Trust, abrdn Platinum ETF Trust and abrdn Palladium ETF Trust.

ALPS Distributors, Inc. is the distributor for abrdn ETFs.

ALPS Distributors, Inc. is not affiliated with the companies of abrdn.

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Fund Risk: There are risks associated with investing including possible loss of principal. Commodities generally are volatile and are not suitable for all investors. There can be no assurance that the Fund’s investment objective will be met at any time. The commodities markets and the prices of various commodities may fluctuate widely based on a variety of factors. Because the Fund's performance is linked to the performance of highly volatile commodities, investors should consider purchasing shares of the Fund only as part of an overall diversified portfolio and should be willing to assume the risks of potentially significant fluctuations in the value of the Fund. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. The Fund’s return may not match the return of the index.

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As a "non-diversified" fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of Shares may be more volatile than the values of shares of more diversified funds.

During situations where the cost of any futures contracts for delivery on dates further in the future is higher than those for delivery closer in time, the value of the Fund holding such contracts will decrease over time unless the spot price of that contract increases by the same rate as the rate of the variation in the price of the futures contract. The rate of variation could be quite significant and last for an indeterminate period of time, reducing the value of the Fund.

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The abrdn Bloomberg Industrial Metals K-1 Free ETF is new and has limited operating history.

“Bloomberg®” and “Bloomberg Commodity Index Total ReturnSM,” “Bloomberg Commodity Index 3 Month ForwardSM” and “Bloomberg Industrial Metals Subindex Total ReturnSM” are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by abrdn ETFs Advisors LLC. Bloomberg is not affiliated with abrdn ETFs Advisors LLC, and Bloomberg does not approve, endorse, review, or recommend abrdn Bloomberg All Commodity Strategy K-1 Free ETF (BCI), abrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (BCD), and abrdn Bloomberg Industrial Metals K-1 Free ETF (BCIM). Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to Bloomberg Commodity Index Total Return, Bloomberg Commodity Index 3 Month Forward” and “Bloomberg Industrial Metals Subindex Total Return".

Please see the current prospectus, www.abrdn.com/us/etf for more information regarding the risk associated with an investment in the Funds.

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Standard Deviation: Standard deviation is a statistical measure of the extent to which returns of an asset vary from its average.

Bloomberg Commodity Index: The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index distributed by Bloomberg Indexes.

Discount- A situation when the share price of a fund trades below its net asset value.

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The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market.

Annualized Volatility is a statistical measure of the dispersion of returns for a given security or market index

Beta is a measure of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk of the entire market

Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk
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