Silver is not cheaper gold; it is a different investment. It is half an industrial metal, has a considerably smaller market, and carries 19 percent VAT in Germany. That explains both the bigger swings and the higher round-trip costs.
Gold is bought almost exclusively to be held. Silver is different: photovoltaics, electronics, soldering and medicine actually consume it. That demand responds to the economic cycle, to substitution and to technological change.
The result is a double dependency. In phases of rising investment demand combined with strong industry, silver can far outperform gold. If industrial demand collapses while investors flee into gold at the same time, silver falls disproportionately.
The smaller market size is the underrated point. When the same sum of money that moves the gold price by one percent flows into the silver market, the effect is several times larger. That works in both directions, and it explains why silver shows both the sharper rallies and the deeper falls.
Since 2025, new silver coins and silver bars in Germany have carried the full 19 percent VAT rate; the earlier margin scheme for imported coins no longer applies to new stock. Investment gold remains exempt under §25c UStG.
In practice that means silver has to rise considerably further than gold just to cover the cost of entry. Work with final prices rather than spot prices when comparing the two metals.
If you buy silver mainly for the metal weight, choose large units. On a kilo bar the tax block is spread across considerably more fine silver than on one-ounce coins.
The low unit price allows genuine divisibility: if you want to sell in small steps, you can do it with one-ounce coins without touching a large holding. For smaller budgets, silver is the only way to hold a meaningful quantity of precious metal at all.
And industrial demand is not only a risk but also a prospect: applications in photovoltaics consume silver permanently, without it returning to the market. Whether and how strongly that feeds through to the price is an open question — there are no reliable forecasts, and anyone promising them should not be your yardstick.
Silver can be a sensible supplement, but it is more volatile than gold and, in Germany, more expensive at entry because of 19 percent VAT. If you want smaller swings, weight gold more heavily. No honest general recommendation is possible.
Because new silver coins and bars carry 19 percent VAT in Germany and the premium is somewhat higher than on gold. You do not get that tax back when you later sell.
Large units. On a kilo bar, tax and premium are spread across considerably more fine silver than on one-ounce coins. For divisibility, coins are still more practical.
For the same euro value, about 80 times the volume of gold. A kilo bar of silver is considerably larger than a kilo bar of gold and worth a fraction of it — which matters when planning storage.
This article contains no price forecast and no investment advice. Figures on volatility and demand structure are magnitudes as at July 2026.