Widely read:
Summary: Silver has quietly outperformed gold over the last three years, beating it both in the past 12 months and on a three-year basis. Yet, gold continues to attract record inflows from Indian investors. Why is that? In this story, we break down the real case for silver, but also reveal why history warns caution. So, should you stick with gold or bet on silver’s surge? The answer might surprise you.
In the glittering world of precious metals, gold has always hogged the limelight. It’s the safe-haven asset investors rush to in times of crisis and the one with cultural and emotional appeal in India.
According to World Gold Council data, India’s gold ETFs attracted net inflows of $233 million (about Rs 2,000 crore) in August 2025, a staggering 67 per cent jump from the previous month itself.
Equally impressive, the year-to-date inflows have reached $1.23 billion (nearly Rs 11,000 crore), just shy of the full-year total of $1.29 billion (around Rs 11,300 crore) in 2024.
Clearly, investors are piling into gold despite its already high prices.
Silver, by contrast, has always played second fiddle.
However, over the last three years, silver has quietly outpaced gold. In the past 12 months, silver prices have gained 46.29 per cent, just ahead of gold’s 46.03 per cent.
And this isn’t a one-off. Over the past three years, silver has delivered 30.6 per cent annualised returns, compared with gold’s 26.6 per cent.
So, does this mean silver deserves a bigger place in your portfolio? Let’s weigh both sides.
The case for silver
- Industrial demand: Unlike gold, which is largely a store of value, silver has extensive industrial uses. It’s a critical input in electronics, solar panels and particularly electric vehicles (EVs), where it’s used in batteries and circuits. As the green transition accelerates, industrial demand for silver is set to rise.
- Supply constraints: According to industry reports, global silver supply is tightening, with global demand higher for the fourth straight year. Many silver mines are reaching maturity, and new supply hasn’t kept pace with demand. That supply-demand imbalance can push prices higher.
The no silver lining
But before you rush to buy, remember: silver has a long history of disappointing investors.
- Long stretches of stagnation: Between 1998 and 2003, silver grew at just 1.5 per cent annually, hardly keeping pace with inflation.
- Lost decade: After a surge between 2008 and 2011, silver entered a brutal downturn. From 2012 to 2020, an investor would have made negative returns, waiting eight years just to break even
- Steep crashes: In fact, silver fell for three consecutive years (2013–2015), losing nearly half its value in that stretch, according to SilverPrice data.
Gold, by contrast, has had its dull years too; from 1980 to 2003, it grew only 6.8 per cent annually. But since 2003, gold has delivered a much healthier 15 per cent annualised return, showing resilience across cycles.
And here’s a telling statistic: since 2010, gold has beaten silver in 10 calendar years.
In other words, while both metals can shine, gold tends to deliver those returns with far fewer gut-wrenching swings.
The verdict
Silver may have outpaced gold recently, but history shows it to be the far more volatile cousin. Its performance is highly cyclical, heavily tied to industrial demand and prone to long droughts followed by sudden bursts.
Gold, on the other hand, has been more reliable as a portfolio stabiliser. It may not always deliver the highest returns, but it offers consistency, global liquidity and a proven track record as a hedge against inflation and market turmoil.
Our take
Gold remains the better long-term bet, though we suggest you invest through SIPs only, as the price of the yellow metal has surged in recent years.
At Value Research, our view is simple: keep around 10 per cent exposure to gold, preferably through ETFs or gold mutual funds, and treat silver only as a satellite allocation if at all.
Want to invest in a gold fund or a fund of fund (FoF)?
Check our Value Research Ratings. At present, five gold funds and FoFs carry a rating of four stars or higher. Our rating system is not the final word, but it does give you a reliable starting point to identify strong gold investment options.
For the uninitiated, a fund of fund (FoF) is a mutual fund that invests in another fund, instead of buying gold directly. For example, a gold FoF typically invests in a gold ETF, making it easier for investors who don’t have a demat account to get exposure to gold.
Also read: Everyone's talking about gold. But silver is quietly winning
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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