XAU vs XAG: Commodity Returns, Risk & Volatility (2026)

Q: Which is a better investment: XAU or XAG?

Over the past year, it depends: XAG led on total return (XAG +185.4% vs XAU +79.5%), but XAU had the higher Sharpe ratio (XAU 2.26 vs XAG 2.12). On risk, XAU was less volatile (XAU 25.1% vs XAG 54.5%), XAU had a smaller max drawdown (XAU -13.9% vs XAG -39.3%), and XAU had less severe losses on the worst 5% of days (Expected Shortfall of XAU -3.79% vs XAG -9.35%).

Written by Gale Finance Team

Reviewed by Sid Kalla CFA Charterholder

Quick answer

Which is a better investment: XAU or XAG?

Over the past year, results are mixed (+79.5% vs +185.4%).

Total Return

XAU +79.5%

XAG WIN +185.4%

Sharpe Ratio

XAU WIN 2.26

XAG 2.12

Annualized Volatility

XAU WIN 25.1%

XAG 54.5%

Max Drawdown

XAU WIN -13.9%

XAG -39.3%

Analysis period: 2025-02-27 to 2026-02-25

XAU Total Return

↑ +79.5%

XAG Total Return

↑ +185.4%

Relative Performance of XAU vs XAG (Normalized to 100)

XAU XAG

Normalized to 100 at start date for comparison

Key Takeaways

Total Return: XAU delivered a +79.5% total return, while XAG returned +185.4% over the same period. XAG outperformed on total returns.
Risk-Adjusted Return (Sharpe Ratio): XAU had a higher Sharpe (2.26 vs 2.12), indicating better risk-adjusted performance.
Volatility (Annualized): XAG was more volatile, with 54.5% annualized volatility, versus 25.1% for XAU.
Maximum Drawdown: XAU's maximum drawdown was -13.9%, while XAG experienced a deeper drawdown of -39.3%.
Tail Risk (VaR & Expected Shortfall): At the 5% level (daily log returns), XAU's VaR was -2.26% and its Expected Shortfall (CVaR) was -3.79%; XAG's were -3.37% and -9.35%. VaR is the cutoff; Expected Shortfall is the average move on the worst days.
Skew & Kurtosis: Skew: XAU -1.21 vs XAG -3.87. Excess kurtosis: XAU 8.24 vs XAG 31.74. Negative skew leans downside; higher excess kurtosis means fatter tails.
Tail Days & Extremes: 2σ tail days (down/up): XAU 6/4, XAG 6/3. Worst day: XAU -9.87% (2026-01-30) vs XAG -28.03% (2026-01-30). Best day: XAU +6.13% (2026-02-03) vs XAG +9.19% (2026-02-06).
Risk ratios: Sortino - XAU: 3.28 vs. XAG: 2.78 , Calmar - XAU: 5.76 vs. XAG: 4.77 , Sterling - XAU: 5.46 vs. XAG: 8.28 , Treynor - XAU: 16.48 vs. XAG: 1.96 , Ulcer Index - XAU: 3.85% vs. XAG: 9.41%

Gold vs Silver Correlation

0.68 Average Correlation

Gold and Silver are strongly correlated over the past year. With a correlation of 0.68, these assets tend to move together, limiting diversification benefits.

For portfolio construction, this strong correlation means holding both XAU and XAG provides limited risk reduction — they're likely to decline together in downturns.

Metric	Value
Current (30-day)	0.90
Average (full period)	0.68
Minimum	0.24
Maximum	0.91

Correlation measures how closely two assets move together. Values near +1 indicate strong co-movement, near 0 indicates independence, and negative values indicate inverse movement.

Investment Comparison

If you invested $10,000 in each asset on February 27, 2025:

XAU $17,952.38 +79.5%

XAG $28,536.7 +185.4%

Difference: $10,584.32 (XAG ahead)

Gold and Silver: Risk Analysis

Gold experienced its maximum drawdown of -13.9% from 2026-01-28 to 2026-02-02. It has not yet recovered to its previous peak.

Silver experienced its maximum drawdown of -39.3% from 2026-01-28 to 2026-02-05. It has not yet recovered to its previous peak.

Smaller drawdowns and faster recoveries indicate lower downside risk and greater resilience during market stress.

Sharpe Ratio of XAU and XAG

XAU Sharpe Ratio

↑ 2.26

XAG Sharpe Ratio

↑ 2.12

Sharpe ratio measures return per unit of risk (volatility). A higher Sharpe indicates better risk-adjusted performance. XAU had a higher Sharpe (2.26 vs 2.12), indicating better risk-adjusted performance.

A Sharpe above 1.0 is generally considered good, above 2.0 is excellent. Negative Sharpe means the asset underperformed the risk-free rate. Calculated on each asset's full 365-day lookback of available prices and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Sortino Ratio of XAU and XAG

XAU Sortino Ratio

↑ 3.28

XAG Sortino Ratio

↑ 2.78

Sortino ratio measures return per unit of downside risk. Unlike Sharpe, it only counts downside deviation (returns below the target return). XAU had better downside-adjusted returns.

A higher Sortino is better. It's useful when upside volatility is common (crypto is the obvious example). Downside deviation: XAU 17.2% vs XAG 41.5%. Calculated on each asset's full 365-day lookback of available prices, using the daily risk-free rate as the target return, and annualized using the asset calendar (365 for crypto, 252 trading days for equities/ETFs/metals).

Calmar Ratio of XAU and XAG

XAU Calmar Ratio

↑ 5.76

XAG Calmar Ratio

↑ 4.77

Calmar ratio compares CAGR to maximum drawdown. Higher Calmar means more return per unit of worst drawdown. XAU posted the higher Calmar ratio.

Calmar is computed on each asset's full 365-day lookback and uses the max drawdown over that same window.

Sterling Ratio of XAU and XAG

XAU Sterling Ratio

↑ 5.46

XAG Sterling Ratio

↑ 8.28

Sterling ratio measures excess return per unit of average drawdown (typically drawdowns worse than 10%). XAG posted the higher Sterling ratio.

Sterling uses average drawdown events deeper than 10% and subtracts the risk-free rate to report excess return.

Treynor Ratio of XAU and XAG

XAU Treynor Ratio

↑ 16.48

XAG Treynor Ratio

↑ 1.96

Treynor ratio measures excess return per unit of market risk (beta) instead of total volatility. XAU posted the higher Treynor ratio.

Treynor uses beta vs the S&P 500 (SPY) on shared dates and the average 3-month Treasury rate as the risk-free rate.

Ulcer Index of XAU and XAG

XAU Ulcer Index

3.85%

XAG Ulcer Index

9.41%

Ulcer Index captures drawdown depth and duration. Lower Ulcer Index means less drawdown pain. XAU had the lower Ulcer Index (less drawdown pain).

Ulcer Index is computed from each asset's drawdown series over the full lookback window.

Tail Risk & Distribution Shape (1-Year): Gold vs. Silver

This section looks at the shape of daily returns, not just the average. Tail stats are computed per asset on its own daily series (crypto includes weekends). We use daily log returns $\ln\left(\frac{P_t}{P_{t-1}}\right)$ so multi-day moves add cleanly.

Definitions: Value at Risk (VaR), Expected Shortfall, skew, kurtosis, and fat tails.

Metric (1-Year)	XAU	XAG
5% VaR (daily log return)	-2.26%	-3.37%
5% Expected Shortfall (CVaR)	-3.79% (worst 13 days)	-9.35% (worst 13 days)
Skew	-1.21	-3.87
Excess kurtosis	8.24	31.74
2σ tail days (down / up)	6 / 4	6 / 3
Worst day	-9.87% (2026-01-30)	-28.03% (2026-01-30)
Best day	+6.13% (2026-02-03)	+9.19% (2026-02-06)

Downside co-moves (2σ) — 1-Year

Computed on shared dates only (n=256). A “2σ downside move” means a shared-close log return more than 2 standard deviations below that asset’s own mean on this shared-date series. Dates below show simple returns (%) for readability.

When XAG has a big down day, XAU also does

83.3%

5 / 6 days

When XAU has a big down day, XAG also does

83.3%

5 / 6 days

Show downside tail dates

Dates below are shared-date observations. The “Date” is the period end (close). Tail thresholds are computed on log returns, but the table shows simple returns (%) for readability. Returns are computed from the previous shared close to this one (for example, Friday → Monday includes weekend moves).

Days when both XAU and XAG had a big down day (2σ)

Date (interval)	XAU	XAG
2025-10-21	-5.31%	-7.10%
2025-12-26 → 2025-12-29	-4.40%	-8.02%
2026-01-30	-9.87%	-28.03%
2026-02-05	-3.73%	-19.55%
2026-02-12	-3.20%	-10.66%

Days when XAU had a big down day

Date (interval)	XAU	XAG
2025-10-21	-5.31%	-7.10%
2025-12-26 → 2025-12-29	-4.40%	-8.02%
2026-01-30	-9.87%	-28.03%
2026-01-30 → 2026-02-02	-3.85%	-4.65%
2026-02-05	-3.73%	-19.55%
2026-02-12	-3.20%	-10.66%

Days when XAG had a big down day

Date (interval)	XAU	XAG
2025-04-04	-2.52%	-6.64%
2025-10-21	-5.31%	-7.10%
2025-12-26 → 2025-12-29	-4.40%	-8.02%
2026-01-30	-9.87%	-28.03%
2026-02-05	-3.73%	-19.55%
2026-02-12	-3.20%	-10.66%

Read this as “how ugly the ugly days get”, not as a precise forecast. One-year samples are small, so tail estimates are inherently noisy.

Gold vs Silver Volatility (XAU vs XAG)

XAU Volatility

25.1%

±1.58% daily

XAG Volatility

54.5%

±3.43% daily

Typical daily swing

XAU

±1.58%

XAG

±3.43%

Gold's annualized volatility of 25.1% means it typically moves ±1.58% on any given day.

Silver's annualized volatility of 54.5% means it typically moves ±3.43% on any given day.

XAG's higher volatility means a wider path to returns — this can be attractive for tactical, shorter-term exposure, while XAU's smoother profile may better suit long-term allocators seeking steadier growth.

For comparison, the S&P 500 typically has 15-18% annualized volatility, translating to roughly ±1% daily moves. Higher volatility means larger potential gains but also larger potential losses.

Gold vs Silver Performance Over Time

Metric	XAU	XAG
30 Days	3.1%	-14%
90 Days	24.2%	67.1%
180 Days	49.6%	124%
1 Year	79.5%	185.4%

Shorter time frames can show different leaders as market conditions change. Consider your investment horizon when comparing performance.

Full Comparison of Gold vs. Silver (1-Year)

Metric	XAU	XAG
Total Return	+79.5%	+185.4%
Annualized Volatility	25.1%	54.5%
Sharpe Ratio	2.26	2.12
Sortino Ratio	3.28	2.78
Calmar Ratio	5.76	4.77
Sterling Ratio	5.46	8.28
Treynor Ratio	16.48	1.96
Ulcer Index	3.85%	9.41%
Max Drawdown	-13.9%	-39.3%
Avg Correlation to S&P 500	-0.06	0.14
5% VaR (daily log return)	-2.26%	-3.37%
5% Expected Shortfall (CVaR)	-3.79%	-9.35%
Skew	-1.21	-3.87
Excess kurtosis	8.24	31.74
2σ tail days (down / up)	6 / 4	6 / 3

Audit this calculation

Formulas, inputs, and conventions used to compute the metrics on this page.

Inputs & conventions

Shared window for pair metrics: 2025-02-27 → 2026-02-25 (last shared close).
Rolling correlation sample (shared closes): 227 rolling 30-day values (from 256 shared daily returns).
Annualization (days/year): XAU: 252 days/year; XAG: 252 days/year.
Risk-free rate: Uses the 3-month U.S. Treasury yield (FRED: DGS3MO), averaged over each asset’s window:

XAU: 4.20% over 2025-02-27 → 2026-02-25.

XAG: 4.20% over 2025-02-27 → 2026-02-25.
Volatility drag (rule of thumb): Estimated from annualized volatility (simple returns). For the log-return framing, see Log returns.

XAU: ≈ -3.2%/yr

XAG: ≈ -14.9%/yr
Data alignment: No forward fill. Correlation and tail co-moves are computed on shared closes only.
For cross-calendar pairs (e.g., crypto vs stocks), weekend/holiday moves roll into the next shared close.
Return conventions: Volatility/Sharpe/Sortino use simple daily returns. Tail-risk uses daily log returns for distribution stats (but tables show simple returns). Log returns.

Formulas

Daily simple return

r_t = \frac{P_t}{P_{t-1}} - 1

Volatility

\sigma_{ann} = \sigma(r_t)\sqrt{A}

Volatility drag (approx.)

\text{drag} \approx \tfrac{1}{2}\sigma_{ann}^2

Sharpe Ratio

S = \frac{A\,\bar{r} - r_f}{\sigma(r_t)\sqrt{A}}

Sortino Ratio

So = \frac{A\,\bar{r} - r_f}{\sqrt{\mathbb{E}[\min(0,\,r_t - r_f/A)^2]}\,\sqrt{A}}

Maximum Drawdown

MDD = \min_t\left(\frac{P_t}{\max_{s \le t} P_s} - 1\right)

Average Correlation

\rho = \frac{\operatorname{cov}(r^A,\,r^B)}{\sigma_A\,\sigma_B}

Log returns

\ell_t = \ln\left(\frac{P_t}{P_{t-1}}\right)

Notation

$P_t$: Price on day t.
$r_t$: Simple daily return.
$\ell_t$: Log daily return.
$\bar{r}$: Average daily return.
$\sigma(r_t)$: Standard deviation of daily returns.
$A$: Annualization factor (days/year).
$r_f$: Annual risk-free rate.

Gold vs Silver: Frequently Asked Questions

Which has higher volatility: XAU or XAG?

XAG showed higher volatility at 54.5% annualized, compared to 25.1% for XAU Over the past year. Higher volatility means larger price swings in both directions.

Does XAU provide diversification when held with XAG?

XAU and XAG are strongly correlated over the past year, with an average correlation of 0.68. This strong correlation limits diversification benefits.

How bad are the worst 5% days for XAU vs XAG?

Over the past year, XAU's 5% VaR was -2.26% and its 5% Expected Shortfall was -3.79% (worst 13 days). XAG's were -3.37% and -9.35% (worst 13 days).

Do XAU and XAG crash together on bad days?

On shared dates (n=256), when XAG has a 2σ down day, XAU also does 83.3% (5/6 days). In the other direction, when XAU has one, XAG also does 83.3% (5/6 days).

Which has better risk-adjusted returns: XAU or XAG?

XAU showed better risk-adjusted performance with a Sharpe ratio of 2.26 versus XAG's 2.12 Over the past year.

Can XAU and XAG be combined in a portfolio?

Yes, though allocation sizing matters. Their strong correlation provides limited risk reduction since they tend to move together. XAG's higher volatility (54.5%) means even small allocations can materially impact overall portfolio risk.