Silver ain’t for the faint of heart.

The metal’s price swings have rattled investors so much that even a 10 percent rally last month wasn’t enough to boost purchases of exchange-traded funds backed by silver.

While the appeal of precious metals got a boost from stimulus measures in Europe and Asia aimed at bolstering stagnant economies, the rise in value also brought a surge in volatility. A week after nearing a bull market, prices on Jan. 29 fell the most since 2013, wiping $645 million in one day from the value of global funds linked to silver.

“We don’t ever invest in silver since it’s just so volatile,” James Shelton, who helps oversee $2.2 billion as chief investment officer of Kanaly Trust Co. in Houston, said in a telephone interview on Jan. 28. “If we feel we need to invest in precious metals, it will probably be gold.”

The volatility in silver over the past five years has been about double that of gold, data compiled by Bloomberg show. Bigger price swings increase the chances of bigger losses compared with more stable assets.

Silver futures on the Comex in New York reached a four- month high of $18.505 an ounce on Jan. 21, and were up as much as 19 percent from a four-year closing low in November. While prices tumbled 19 percent in 2014 and 36 percent a year earlier, gold futures were little changed last year after dropping 28 percent in 2013.

Holdings in ETPs backed by silver fell 0.3 percent last month, after declining 3 percent in December, while gold holdings jumped 4.1 percent in January, data compiled by Bloomberg show. Retail investors account for 80 percent of U.S. purchases, ETF Securities LLC estimates.

Industrial Use

About half of silver’s use is as an investment or in jewelry, compared with 90 percent for gold, while the other half is for industrial products, from electronics to photographic film, industry data show.

Silver’s 30-week correlation coefficient to gold is at 0.82. A reading of 1 signals prices moving in lockstep. By comparison, silver’s correlation with an index of industrial metals is at 0.3.

“Silver’s dual role adds to its volatility as it reacts to both the markets,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview Jan. 27. “Silver is riskier than most metals. There is a nickname for silver: The devil’s metal. And that’s probably not an accident.”

Most mining companies that sometimes lock in favorable prices for their production through hedging contracts refrained from doing so during the swing in silver. At the end of 2014, the amount of metal committed to hedging contracts was the smallest in a decade, according to CPM Group LLC, a New York- based commodities research and consulting company.

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