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Summary: Silver has quietly outperformed both gold and equities in recent months, riding high on industrial demand and short-term momentum. So, does that make it a solid addition to your portfolio? Let’s find out…
For a metal that’s often treated as gold’s moody younger sibling, silver has been having quite the moment.
While gold has hogged headlines, thanks to geopolitical turmoil, central bank buying and its ever-dependable “safe haven” tag, silver has quietly outshone its shinier cousin.
Over the last three years, silver delivered a return of 26.5 per cent, edging past gold’s 24 per cent. Even more eye-catching is silver’s short-term sprint: up 19.5 per cent in the last three months, and nearly 8 per cent in just the past month. That’s more than five times gold’s one-month return.
Heck, even equity funds have trailed silver in recent months.
But is this just a seasonal sparkle or the beginning of a more durable shine?
The case for silver
Unlike gold, which largely sits idle in central bank vaults and bridal trousseaus, silver gets things done. It’s used in industrial applications, from solar panels to electronics to electric vehicles. As the green energy wave gathers steam, silver’s industrial demand has steadily risen. That gives silver a dual engine: it’s both a precious metal and an industrial metal.
That means silver can benefit from both market uncertainty and economic expansion. It’s rare for an asset class to wear both hats, and that’s what makes silver particularly interesting in this cycle.
But the shine comes with scratches
Of course, there’s always a catch. Silver may be glimmering now, but its long-term chart reads like a cautionary tale in patience.
Post the 2008 financial crisis, silver skyrocketed, from Rs 26,000 in 2009 to over Rs 61,000 in 2011. But then came the long winter. For nine years, prices either fell or flatlined. No investor — no matter how zen — enjoys waiting nine years for a recovery.
Silver is also significantly more volatile than gold, and that volatility can rattle even seasoned investors. Just look at the calendar year returns since 2020: silver has swung from a spectacular +51.5 per cent in 2020 to a sobering -9.8 per cent in 2021, as per silverprice.org. In contrast, gold has been far more composed, ranging from a high of +30.4 per cent in 2020 to a mild dip of -1.6 per cent in 2021.
What about silver ETFs and FoFs?
In India, silver as an investment option is still relatively new. The first silver ETF launched just three-and-a-half years ago. That’s not insignificant, but it isn’t seasoned either. Most financial planners would prefer a product to complete at least one full market cycle (typically 5–7 years) before calling it reliable.
Silver funds also have their own set of issues. For one, they don’t always perfectly match silver’s actual price (this is called tracking error). And two, they can be harder to sell quickly, especially when markets are down.
In fact, only three silver ETFs in India have crossed Rs 1,000 crore in size, which tells you the market is still quite small.
So, should you invest?
If you’re feeling a bit of FOMO, that’s understandable. Silver’s recent returns have been dazzling. But don’t let the shine blind you.
Your best bet is to stay with equity, debt, and just a dash of gold for diversification.
Where should you invest your money today?
Chasing returns is tempting, but building wealth demands a balanced plan. At Value Research Fund Advisor, we help you stay grounded, with a personalised asset allocation strategy that puts your goals first, not market noise.
Plus, get our recommended list of equity and debt funds.
This article was originally published on July 24, 2025.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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