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Copper’s climb and the gold rush – what’s next and could you be sitting on a treasure trove of your own?

Why is copper and gold trending, what’s next for these precious metals, and could you be sitting on a treasure trove of your own at home? We take a closer look.
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This podcast isn’t personal advice. If you’re not sure what’s right for you, please ask for advice. Investments can rise and fall in value so you could get back less than you invest.

As geopolitical risks have intensified, it has sparked a surge of interest in gold.

So far, the shiny stuff has been on a glittering rally, helped by its perception as a ‘safe-haven’ asset.

It’s also been in demand as a hedge against inflation – with the price spiral in the US proving particularly stubborn.


Hedging is a strategy used to provide a level of certainty and shelter against the risk of financial loss. It’s a technique that can be used by investors and fund managers to try to reduce the risks associated with things like currency movements in financial markets.

When inflation is running hot, bonds are considered less attractive, because the income they pay doesn’t keep up with inflation. As a result, we usually see investors shift from cash into other investments, including gold.

Meanwhile, central banks have also been buying gold which has helped drive the price higher. China has been the largest recent buyer, followed by Kazakhstan, India and Turkey.

Copper has also soared in price since February, pushed sharply higher amid concerns about supply risks at mines and also improving prospects for the metal’s role in the energy transition.

The demand for copper for everything from wind-turbines to electrical charging stations is possibly partly behind the interest of BHP, the world’s largest listed miner, in Anglo American.

As these metals prices have moved higher – it’s drawn in more speculators hoping to capitalise on any future price increases.

China’s consumers also have shown a voracious appetite for gold – with the purchase of jewellery, bars and coins swelling to record levels last year.

But sought after metals and minerals are also lying, unused around our homes, in cables, chargers and the phones themselves.

The not-for-profit organisation Material Focus aims to change that with its campaign ‘Recycle Your Electricals’.

On our latest Switch Your Money on Podcast, ‘The gold rush’ Executive Director Scott Butler detailed the scale of this undiscovered treasure trove.

Around 880 million tech items are hoarded in the UK – the average household has £1,000 of unused, functioning tech lying discarded. It’s also estimated that, in total, around £1bn of metal is stored in homes across the UK.

Instead of ransacking wardrobes for unwanted fashions to flog on resale sites, sorting out the drawers of doom to find discarded electrical items might be more lucrative.

Want to find out more on all things precious metals?

Listen to our latest podcast episode now.

Podcast transcript

Susannah Streeter: Hello and welcome to Switch Your Money On from Hargreaves Lansdown. I’m Susannah Streeter, Head of Money and Markets.

Sarah Coles: And I’m Sarah Coles – Head of Personal Finance.

Susannah Streeter: Great to be with you – and out of the house – with a different look at the world of money to the one I’m subjected to most days – requests to increase the pocket money – or find odd jobs for my teenage sons to do! They are at that tricky stage of not being quite old enough for a proper job, but still wanting to spend dosh on going out.

Sarah Coles: I have one of those in my house too – and demands are coming thick and fast – particularly when it comes to driving lessons.

Susannah Streeter: One of the strategies is to find things in the house that they can sell, including the ‘Drawer of doom,’ where all the discarded tech lurks. And the potential resale value of it all has got me thinking about the rising price of metals that we’ve seen recently.

Sarah Coles: Yes – gold, in particular, soared spectacularly and broke new records during the past few weeks.

Susannah Streeter: So, in this edition of the podcast, it seems super-timely – for many reasons – to take a deep dive into what’s driven metals prices up – in an episode we’re calling, ‘The Gold Rush.’

Sarah Coles: We’ll look at how some of the biggest listed names in mining are fairing with Sophie Lund-Yates – our Lead Equity Analyst – and we’ll get a wide view of the sector – and the ESG implications – with out Investment Analyst, Matt Britzman.

Susanah Streeter: Plus, if you were wondering – like my son – about the price of scrap or precious metal, we’ll have all the answers with our special guest on the programme today – Scott Butler from Material Focus – and the people behind ‘Recycle Your Electricals.’

So, Scott – I imagine you could work wonders with the ‘Drawer of doom’ in my house!

Scott Butler: Yeah – the ‘Drawer of doom.’ The one thing that unites pretty much every household in the UK is that we’ve got a stash of old tech. We’re not quite sure what to do with it – it might be held onto because it’s got our first mobile phone – it’s cables for things that we have no idea what they’re charging, but our instinct is, the second we get rid of them, we’ll find the thing.

The truth is, we’re all holding on to too much tech – 880 million items are hoarded in the UK – and, if you combine that up with the stuff that we’re regretfully binning – and not recycling – we think around £1bn of metal value is stored in our homes – in our ‘Drawers of doom’ – or our ‘Garages of garbage.’

Susannah Streeter: Thank you – and I look forward to finding out more about the value of my ‘Drawer of doom’ a little bit later in the podcast.

We’ll also be talking to Emma Wall – our Head of Investment Analysis and Research – for a Fund Manager perspective.

But, first of all, it does make sense to take stock of just where metals prices have been heading recently – and why.

First off, gold – t’s been on a glittering rally for weeks now. It’s mainly to do with its perception as a safe-haven asset.

As geopolitical risks intensified – with violence in the Middle East spreading – it sparked a surge in interest in the precious metal.

Sarah Coles: Gold has been in demand as a hedge against inflation – with the price spiral in the US proving particularly stubborn. The latest US Consumer Price Index (CPI) – that data shows that inflation climbed from 3.2% in February to 3.5% in March, which is likely to keep eroding people’s purchasing power. And, as the threat of sustained inflation looms, investors have increasingly turned to gold, which has driven up demand and pushed prices higher.

It’s worth touching on what investors mean by gold being an inflation hedge. The idea is that, at times of higher inflation, bonds are less attractive – because the income they pay doesn’t keep up with inflation. As a result, investors shift from cash and bonds into other assets, including gold – and this pushes the price of gold up, so it keeps up with inflation. There are several periods over which this has happened – including 2022 – but it’s not guaranteed because an awful lot of other things affect the gold price.

Susannah Streeter: On top of this, more recently – as the gold price has moved higher – it’s drawn in more speculators who are hoping to capitalise on future price increases.

Meanwhile, central-bank buying action has also been driving the price of gold upwards.

The latest data from the World Gold Council shows that central banks’ activity in increasing gold reserves grew for the 16th month in a row in February – with China, the largest buyer, followed by Kazakhstan, India, and Turkey.

China’s consumers have also shown a voracious appetite for gold – with the purchase of jewellery, bars, and coins swelling to record levels last year.

With China’s stock markets floundering – and deflation a worry – a growing number of younger Chinese investors are putting their savings into gold – and not just traditional bars or adornments – but little gold beans – pea-sized pieces which weigh about a gram – seen as an entry point of getting exposure.

Expectations of central-bank rate cuts have also partly boosted the appeal of gold.

Sarah Coles: It’s also worth saying that the price has slipped back a little, as expectations grew that higher interest rates may have to linger for longer, especially in the US. The issue with higher interest rates is that they make government bonds – like US treasuries – more appealing. Meanwhile, gold loses its lustre because one of the major drawbacks of gold is that it doesn’t pay any income at all.

Nevertheless, gold is still hovering pretty close to record highs – and, as it benefitted from a big bull run, it’s prompted a rueful look in the UK about what happened to our gold reserves.

Susannah Streeter: Around 25 years ago – on 7th May 1999 – Gordon Brown – the then Chancellor – announced the intention for the Bank of England to sell off half the nation’s gold holdings The idea was that this would strengthen the nation’s reserves by diversifying and reducing the proportion held in gold. Back then, gold was deep in a bear market, having lost 80% of its value from a peak in 1980.

Other central banks have indicated they were planning similar, though smaller moves. But signalling the intention to sell such a large sum came in for significant criticism – not least because the price of gold fell around 10% by the time of the first auction in July. In total, the Bank of England offloaded 395 tonnes of gold on the Treasury’s behalf – with an average of $276 per troy ounce – and made a total of $3.5bn.

The money raised is thought to have been used to purchase US-government debt to diversify the nation’s reserves.

Adjusted for inflation, the gold sold off would be worth just over $20bn. In comparison, the same amount – $3.5bn invested in 10-year treasuries and adjusted for inflation – over the same period – would be worth just under $5bn.

So, it was – at the very least – a decision which cost $15bn.

Sarah Coles: I wonder if [s.l. he’d 6:54] make the same decision today. Although, to be fair, you can’t predict the trajectory of metals prices.

Take Lithium, for example. With the advent of electric vehicles, demand for this essential metal – vital for the manufacture of EV batteries – surged – with a great Lithium boom erupting between 2021 and 2022 – but, rather than continuing its upward trajectory, the price then tanked, as sales unexpectedly went off the boil – particularly in China.

Susannah Streeter: After sinking to a low in July 2022, copper prices have also rebounded – with an added surge arriving since February this year. It’s been pushed sharply higher amid concerns about supply risks at mines – and also improving prospects for the metals’ use in the energy transition.

Expected higher demand for copper will likely have been one of the reasons behind mining giant BHP’s unsolicited bid for Anglo American. It was knocked back – with Anglo saying the bid was opportunistic. It stressed that its position to create significant value from its portfolio of high-quality assets that are well-aligned with the energy transition and other major demand trends.

With copper representing 30% of Anglo American’s total production, the company said that the board believes Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises.

I think it’s gonna be their ‘Watch this space’ – as you never know, another bid could emerge. We’ll be chatting to Sophie Lund-Yates about this shortly.

Sarah Coles: Silver has also been shining more brightly – as, like gold, silver is seen as a stable asset during periods of high geopolitical tensions.

Susannah Streeter: It’s also seen as the hedge against inflation – offering shelter against the erosion of purchasing power – given that its supply is inherently limited. However, it retreated from three-year highs towards the end of the month as global risk aversion receded.

Sarah Coles: So, there are clearly challenges as well as opportunities for the mining sector, but what about the opportunities in our own homes?

This is a really good time to bring back in our guest – Scott Butler, from Material Focus.

So, we’ve talked about the ‘Drawer of doom,’ earlier – and just how much there is lying around, unrecycled. Why d’you think people just aren’t spotting the potential ‘Treasure’ that’s left lying around?

Scott Butler: We think around 40% of the UK are currently recycling all of their electricals, which is great – and our ‘Recycle Your Electricals’ campaign is trying to increase that – make it more normal. But the other behaviours are probably driven by a bit of uncertainty.

So, we’ve got tech that we will hold on to – because we might need it in the future – or it’s a cable that charges something – we’re not quite sure what it is – or it’s a spare mobile phone – or it’s a digital camera which might have images on it. That’s the kind of stuff that goes into the drawer – the ‘Drawer of doom,’ as it’s sometimes called – but it’s actually a drawer of hidden treasures. Then, you’ve got the stuff that easily bin-able.

We’ve done a lot of work, looking at where products are in the system – and we’ve got about 880 million tech items hoarded away – unused – which could have value – either material value, or be donated – or even sold – and then we’ve got over 100-and-odd thousand tonnes that are being thrown in the bin – which is then being lost to landfill or energy from waste. And that whole pile of stuff – mixed in different places – we think is around £1bn-worth of material value – at current prices. Of course, prices change all the time.

That’s a significant amount of valuable material – that, otherwise, we have to go and put holes in the ground to get it – which seems common sense. Let’s grab it where it is – where it’s near to us.

Sarah Coles: You mentioned that it’s got lots of valuable materials. What sort of things is lurking in this tech?

Scott Butler: It’s steel – it’s copper – Lithium in ever-increasing portable technologies. Really just some critical raw materials – even in small ear pods, you’ve got Neodymium, which is in the magnets which make the earphones work – and that’s the kind of stuff that’s also used in wind turbines.

So, it’s a mixture of what I would say – the common metals – through to really specialist ones – and it’s increasingly important that those metals are seen as really critical – the geopolitical aspects of them as well – but we need to be investing to innovate – to be recovering those materials.

Susannah Streeter: So, how much can you actually reclaim from all of this recycling? You talk about all the treasures within the earbuds – within the leads – but what kind of proportions are we talking here?

Scott Butler: For most small electricals, we can recover around 75% of the materials at the moment – in terms of recovering the material.

Due to changes in products – older tech used to have brominated flame retardants put into the plastics – and that’s called ‘Persistent Organic Pollutants’ (POPs). That, at the moment – because it’s considered to be a hazard – has to go from energy from waste – and we don’t include that in our stats. But, for small electricals, you’re looking at 75% material recovery.

For larger electricals – like washing machines and dishwashers – which are predominantly metals – you’re into the mid-to-high 90% recovery rates as well.

So, that technology exists – it’s UK businesses, who have invested – doing some wonderful things in recovering that material – and that urban mine that we have of these electricals is going to be a really important source, going forward.

Sarah Coles: You mentioned that the recycling – one of the reasons people don’t do it is because of that uncertainty about the future – maybe you needing it – or maybe not knowing that people need to recycle.

What the trends like here? Are people more likely to know about it now – are they recycling more – is it easier for them?

Scott Butler: We’ve created a national, ‘Recycle Your Electricals’ campaign.

When we started, we had availability of around 3,000 drop-off points – working with local authorities and retailers – and others – we’ve now got a postcode located with 22,000 points on. So, it’s probably a lot easier than people think. We’re also investing in local authorities and charities to add more drop-off points. We’re adding curb-side collections in some areas – where that’s possible. We’ve been add and about across social – and, even on TV ads, we’ve got a messenger – a pink, psychedelic, hypnotic, techno-loving cat – who, if you’ve seen once, you won’t forget. And the idea there is just to try and cut through the noise of the world.

It's a very noisy world. We’re all using tech – it’s great – but also let’s value it when we no longer need it. It’s not just about recycling. We’re trying to make recycling the worst thing that we do.

Over the top of that, there are things like donations for digital inclusion projects. Selling your electricals – I’ve got teenage children too – and suffering. I hear the pain that you mentioned at the start of the podcast – and our recent research suggests that the average household has at least £1,000-worth of unused, working tech that has a value – and there’s lots of platforms for doing that.

So, there’s a lot of stuff around here, where the opportunities are currently being lost by too many – and we’re just trying to make this a normal thing that everybody does – like recycling plastic, cardboard, food packaging – and the rest.

Susannah Streeter: Obviously, this offers great potential for your business. Now that the value of metals has risen, how has that affected your business?

Scott Butler: We’re a not-for-profit – so we don’t handle the material – we enable people to access the system.

You do see peaks and troughs – when metal prices are high – particularly steel. It’s the same issue as the railway tracks. When those core metal prices are high, you get some theft – or material goes into different routes. There’s still scrap metal merchants that maybe shouldn’t be recycling at the quality that they are – we would prefer to go to a specialist electrical recycler. So, you just have peaks and troughs that feed through the system – driven by the global markets on that.

But the good news is that there is a lot of capacity in the UK to properly recycle electricals. And that’s the other thing to think of as well. This is tricky stuff – and one product that we’ve been doing a lot of focus on recently is disposable vapes in the UK – which, environmentally, are a total disaster. And that’s not just a loss of materials in terms of the metals inside of them.

They contain copper – which we know is really important for a Green-Tech future. They contain Lithium – which we know is really important for a Green-Tech future. And they’re also incredibly dangerous if they’re in the wrong place – because those Lithium iron batteries – if damaged or crushed – can start fires – and the challenge that we’ve had with disposable vapes is that they’re thrown in bins – they’re thrown on the streets. Sometimes, they’re going into waste trucks and causing major fires.

So, it’s not just the value of the material – why it’s important to be recycling it – it’s this knock-on impact on the safety of public workers – the cost of fires to communities – the air pollution that may result from that fire. Search – recycle your electricals – clear out that drawer. It’s very likely you’ll fill that drawer with the same stuff over the coming months – but, at least, for a day – or a week – you could have that satisfaction that you’ve done your bit!

Susannah Streeter: Absolutely. You’ve inspired me, Scott – it’s been really fascinating.

Scott Butler: Thank you!

Susannah Streeter: Let’s look now at the investment potential for metals – and look at some of the environmental, social, and governance issues at stake – and bring in Matt Britzman – an Investment

Analyst here at HL – who’s been digging deep into the sector for us.

So, Matt – where should we start?

Matt Britzman: Mining really starts with finding the right place to dig – this can be on the surface or deep underground. From there, the type of mining method used depends largely on where the metal is. Taking gold as an example – open-pit mines tend to be favoured as they’re cheaper to build and run – as the name suggests, these mines stay on the surface as opposed to an underground mine, where you then need complex tunnels and shafts in place.

Unfortunately, for the miners, precious mentals like gold don’t just come out of the ground in a nice block ready to be sold. What comes out of the ground is ore, which is basically rock with valuable metal inside. There’s then a lengthy process that comes next – to go from ore to a final product to be sold on the market.

Now, if that all sounds like a hard job, that’s because it is. It’s also an expensive one too – which is one of the reasons why the mining industry has such high barriers to entry.

Susannah Streeter: That certainly does sound like a lot of work. On that last point – costs are, of course, one part of the equation – when we think about miners’ profits. What are some of the other things that will impact performance?

Matt Britzman: Costs certainly are a big factor – as, of course, is the price of the metal in the open market. Just like any industry – if you can sell something for a higher price, that’s a good thing – but, if those costs rise at the same time, then any benefit can simply fall away.

A key metric for investors to look out for – and track – is a company’s all-in sustaining cost. This looks at not only the operating costs of mining, but also includes costs relating to keeping the mines up and running – with things like capital expenditure and exploration costs included too.

Aside from prices and costs, some of the more nuanced factors are things like ore grade. That’s essentially how much of the ore is useless rock versus the metal you want to extract. The higher the grade, the less rock you need to process – which, of course, saves money.

And then there’s production, itself. Miners often have high fixed costs – so, when commodity prices are running hot, they want to be operating as close to max capacity as possible. The mines have to be maintained and expanded, which can lead to downtime. You also can’t run the mine in the middle of a rainstorm – so weather actually plays a role too.

Sarah Coles: Yes – and we’ve had no shortage of extreme weather events, recently – which must make life harder for miners. Of course, the environment, in general, is a broader consideration for the sector too, isn’t it?

Matt Britzman: Yes – in fact, ESG considerations – more widely – should be an important part of the investment decision for all investors. And that’s true for investors who are actively conscious of

ESG factors, but also those who aren’t.

In today’s world, good ESG practices are just good business. Miners don’t exactly have the best history – when it comes to this – and the sector comes with relatively high ESG risks by default. Mining produces a lot of waste products – and often has a big impact on local communities – so managing those two risks is essential. But it’s not all doom and gloom – new technology and a greater emphasis on good practices are starting to make a difference.

Susannah Streeter: Thanks, Matt. There is clearly an awful lot going on for miners.

So, now let’s bring in Sophie Lund-Yates – our Lead Equity Analyst – for a bit of a closer look at some of the companies operating here.

So, Sophie – what can you tell us about Barrick Gold?

Sophie Lund-Yates: Well, the name slightly gives it away there. Barrick Gold is a miner primarily interested in gold.

The group’s valuation has been lifted to the tune of about 12% since mid-March – and that largely reflects higher gold prices. We’ve seen a so-called ‘Flight to safety’ in recent weeks – in particular, when it comes to investing – because of growing geopolitical uncertainty – and that includes higher levels of investing in assets, colloquially known as safe-haven assets – including gold.

While this is a positive for Barrick, there is a limit to the market’s optimism – and that’s largely because Barrick is struggling to meet its cost targets. Inflation is tempering, but there’s still room for improvement. Things are expected to get better this year, but until there’s a clear signal that the worst is over for the group, there will be limited upside.

It’s also worth mentioning that Barrick also has a hand in copper mining too – which helps diversity things.

Essentially, higher levels of uncertainty in the broader market are playing into Barrick’s hands. The higher gold prices these are stirring up are helping free cash flow in a big way, but this can change at short notice.

Sarah Coles: Thanks, Sophie. So, that’s a big-hitter in gold – what about a miner with a different approach?

Sophie Lund-Yates: Next up is Anglo American. Anglo’s valuation has been even more positively affected than Barrick in recent weeks. The elephant in the room here, of course, is the unexpected takeover offer from fellow miner, BHP.

Now, at the time of recording, Anglo had rejected the bid, but the possibility of a buyout has boosted the valuation. That’s because there could be other potentially more lucrative offers. If a deal is eventually struck, it would massively change Anglo’s business – because BHP want some, but not all, of its assets. But, for now – while there is no guarantee of a deal – it’s important to focus on the business as-is.

Anglo is more exposed to iron ore and copper, but it also has smaller interests in nickel, diamonds, and platinum. From a consumer angle, it might be tough to believe that diamond markets can be difficult, but that’s something which has dented Anglo’s performance more recently. There have also been wobbles in expectations for nickel pricing.

Altogether, Anglo has written down – so reassessed the value of these operations downwards by about $2.1bn. Now, that is, of course, a tough pill to swallow, but there’s a lot to be said about rebasing expectations. It means there’s a clean slate to build from.

The group’s also buying iron-ore resources from the a group called ‘Vale’ – which will give access to higher-grade materials and should ultimately result in lower costs at one of its main mines – albeit this won’t happen overnight.

The team feels there’s scope for a turnaround, but Anglo’s current positioning could be deemed higher-risk – and nothing’s guaranteed.

Susannah Streeter: We do like a good turnaround story – thanks, Sophie. What’s the final name you have this week?

Sophie Lund-Yates: That would be Rio Tinto. Rio is very much an iron-ore story, which is one of the materials that has very close links with economic cycles – it’s used a lot in construction, for example. Theare are some question marks about demand from China – which is the biggest consumer of iron ore.

Overall, the last time we heard, Rio’s iron ore business was doing reasonably well, with the effect of lower prices being offset by higher volumes.

The group’s also accelerating exposure to copper and aluminium. The reason this matters is because these materials are very important to the energy transition. So, if we think about long-term trends the miners can take advantage of to try and speed up revenues – the production of components of electric vehicles – or energy generation – is absolutely a very important one – and an area where we see demand being elevated for some time.

For now – just to reiterate – Rio’s portfolio remains very weighted to iron ore – which means sentiment can be even more linked to economic ups and downs than average.

Sarah Coles: Thanks, Sophie – there’s certainly always a lot to consider in the sector.

With that in mind, let’s bring in Emma Wall – our Head of Investment Research and Analysis – who’s been discussing the sector in detail with Ned Naylor-Leyland from Jupiter Asset Management.

Emma Wall: Hi, Ned.

Ned Naylor-Leyland: Good afternoon.

Emma Wall: As we are speaking, gold – in recent history – has hit a new all-time high. What is it

that’s driven that gold price higher.

Ned Naylor-Leyland: I think the first thing to say is you’re referring to the US-dollar gold price – because gold, in sterling, has been doing very well for many years!

The reason the gold price in dollars has reached an all-time high is more to do with confidence in US treasuries and the dollar. It’s a reflection of the market’s confidence in local currency, rather than in gold, itself. Having said that, there has been strong central-bank buying and futures-buying – but it feels like a long-term technical breakout. The US-dollar gold price was around $2,000 – $2,050 an ounce – back in 2011 – and then, in 2020 – and it had been struggling to break through that level. Now, it appears to be on something of a substantial and secular move.

Emma Wall: Okay then – stripping out currency – why is it that gold has been proving popular? Because it is fair to say that, historically – whenever we’ve seen potential economic or political socioeconomic unrest – unfortunately, like we are seeing in the Middle East – gold does have this perception of a safe haven. Is that ringing true this time?

Ned Naylor-Leyland: I think there’s an element of that, but it’s hard to strip the currency component out of it – because, really, that’s what it is. Whether you’re in Turkey – and trying to hedge issues, holding Turkish lira – or whether you’re thinking in a financial market sense – like hedging US-government bonds and your exposure to dollars – there’s always that protection that’s coming into the decision-making of allocating towards gold. But I suppose you are right – that, at the margin, some people think that there is an additional premium in the dollar-gold-price for geopolitical reasons.

I’m not convinced of that – but it is definitely true that, when things get rocky, people reach for gold and US treasuries.

Emma Wall: Of course, I should say that nothing’s guaranteed – this perception of a safe haven doesn’t necessarily mean that it is.

Let’s talk about other uses for precious metals – so hedging currency. It could potentially be about reaching for a perception of a safe haven – but, increasingly, precious metals are being used at the forefront of new technologies as well, aren’t they?

Ned Naylor-Leyland: That’s right. I think it’s important to strip out monetary metals from precious metals – or rather identify the difference. Precious metals will include platinum and palladium – where monetary metals is really gold and silver.

Silver is very important in tech – being the most thermally and electrically-conductive metal – and, importantly, the most reflective metal – which means it’s used in solar panels – which, of course, are in very strong and fast-growing demand all round the world.

So, you see silver being used in a whole variety of different applications in relatively small quantities – and in a way that really is invariable. There’s not much that can be done to replace the silver in these use-cases – with the exception of gold – can perform a similar function – but, seeing as gold is 85 times more expensive, it seems improbable that gold will replace silver in any of these uses.

Emma Wall: That’s really interesting. They both have these similar properties – but, actually, on a valuation basis – which, of course, is what you’re looking at, as an investor – silver is more compelling.

Ned Naylor-Leyland: Well, silver’s more compelling for all sorts of reasons. It’s a tighter market – it’s not as liquid on a daily basis. Both are very liquid, but silver is about a tenth of the size – in terms of global turnover on a 24-hour period.

It’s mined at a ratio of around 10:1 – so 10 ounces of silver for an ounce of gold. The geological relationship is about the same – 10 or 12:1 – and its pricing market is 85:1. So, this does offer a very interesting, historical value-entry point for silver versus gold – and we very much like it because, generally, when the two metals are trending lower – versus dollars – then silver will underperform gold – and likewise, when they’re going higher, silver will outperform gold. So, it’s an interesting entry-point on the historic basis – and there’s that natural way that the two metals behave relative to each other.

Also, it appears that global-silver inventories are extremely low, and that demand-case is just getting greater and greater.

India has imported about 15% of global silver-mine supply in the first quarter of the year. So, just in three months, one country has consumed 15% of all the silver coming out of mining projects. And, clearly, that’s not really sustainable – and we think that higher prices do lay ahead of us at some point in the next couple of years.

Emma Wall: I should say nothing’s guaranteed – at this point. As with all investment, prices can go lower as well as rise – but let’s take a moment to think about how you access these metals. Because, of course, the two main ways that people play the gold story – or, indeed, the silver story – is either through the physical metal, itself, or an exchange in product that tracks the physical gold – or physical silver – or miners.

Where do you sit? D’you think you get as much benefit from investing in the miners as you do in the actual metal?

Ned Naylor-Leyland: Well, they’re quite different. Ultimately, physical metal is money – particularly gold. Silver is slightly different because of the above-ground shortage of it.

The mining equities are equities – so, ultimately, they’re in competition for equity investment from other sectors which are more popular – they are cheap relative to historic multiples. But what they represent – as far as I’m concerned – is a way of adding power to your elbow – or attribution to what is a relatively passive way of investing – when you own physical. Now, of course, I like both – and I think that they both have a role to play – but mining stocks have underperformed gold and silver over long periods. They have had shorter periods, where they’ve done very well – but it really is all about what equities are popular – within the general world of global equities – and these have not been popular for a very long time – but I think that, at some point, they will have their time in the sun.

Emma Wall: Ned – thank you very much.

Sarah Coles: That was Emma Wall – talking to Ned Naylor-Leyland of Jupiter Asset Management – and please bear in mind that these are the views of the Fund Manager and are not individual stock recommendations.

Susannah Streeter: You’re listening to Switch Your Money On from Hargreaves Lansdown.

And, before we go, there is time for a quick stat of the week.

So, with gold – I think we’re spoilt for choice for facts and stats. Did you know, for example, that all the gold ever mined would fit into a crate, 22m3 – or that the largest gold coin ever minted was made by the Perth Mint in 2012 – and it was 80cm in diameter and weighed a ton – or that it’s even rarer to find one ounce nugget of gold than a five carat diamond?

Sarah Coles: I didn’t know any of those things!

Susannah Streeter: You can tell the research has been fun on this one! But I’m going to go with the most common use of gold – which is still jewellery – but what percentage of gold is used for this? And, because it’s definitely going to be a guess, I’ll give you 10 percentage points in each direction.

Sarah Coles: You’re right – it does have to be a complete guess. I suppose – for gold used for trading and for tech – but it does feel like jewellery should be a really big chunk of it – so I’m gonna go with 60%.

Susannah Streeter: You’re just too far away – ...

Sarah Coles: [Laughs]

Susannah Streeter: ...the answer’s 49% – which is still a decent chunk of it. There is a lot of precious metal walking around – it seems.

Sarah Coles: Yes – and speaking as someone who found her wedding ring embedded in the bathroom soap last week, I can now go back to being one of them!

Susannah Streeter: Lucky that you’re all pretty clean in your house – you wouldn’t have found it for ages [laughs]! It’s a good job that wasn’t in my house – there’s always the risk that anything that lies around too long will be considered fair game for the eBay pile!

Sarah Coles: I’m not sure they’d get much for mine – I think we spent most of the wedding budget on the party.

Susannah Streeter: That’s all from us for this time – but, before we go, we do need to remind you that this was recorded on 29th April 2024 – and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice – you should seek advice if you’re not sure what’s right for you. Investments rise and fall in value, so you could get back less than you invest – and past performance is not a guide to the future.

Susannah Streeter: Yes – this is not advice or a recommendation to buy, sell, or hold any investment. No view is given on the present or future value – or price of any investment – and investors should form their own view on any proposed investment.

Sarah Coles: And this hasn’t been prepared in accordance with legal requirements designed to promote the independence of investment research – and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research. However, HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent disclosure on our website for more information.

So, all that’s left is for me to thank our guests: Scott, Ned, Sophie, Matt, Emma – and our Producer, Elizabeth Hotson.

Susannah Streeter: Thank you so much for listening. We’ll be back again soon – goodbye!