Precious metal investments require careful selection, especially for commodities like silver.

Why do I say that? Let's start with the fundamentals. Silver's global reserves are actually much higher than gold, which directly affects its scarcity premium. But this very characteristic causes silver's price volatility to be much greater than that of gold.

Next, consider liquidity. Gold, as a long-standing store of value, is highly recognized worldwide, with numerous and convenient channels for liquidation. Although silver has widespread industrial uses, its acceptance as an asset class is noticeably lacking, and selling often involves discounts.

The most critical factor is leverage effect. Silver prices are essentially like magnified gold—its volatility range is several times that of gold. When combined with futures leverage of multiple times, the risk becomes exponential. Having traded precious metals for many years, I learned a deep lesson from the last silver futures cycle—dropping from 10 yuan to 2.7 yuan, some aggressive investors were forced to liquidate at a loss.

If you truly want to allocate assets in precious metals, dollar-cost averaging into physical gold might be a safer approach. Avoid the high volatility of silver and keep risks within manageable limits. This is the correct way to approach long-term asset allocation.