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Silver prices have reached record levels and its pace has even left gold behind. Industrial demand and continuously decreasing supply have made silver the new choice of investors. Now the big question is whether silver can become a strong alternative to gold in the coming years or the role of both the metals will remain different.
New Delhi. Gold and silver have been the favorite metals of investors for a long time, but the rise in silver in the last few years has surprised everyone. Even though gold is a big player in the market and enjoys huge demand from central banks, silver has left gold behind in the price race in the last three years. According to MCX spot data, while gold registered a gain of 139 percent in three years, silver rose by nearly 173 percent. After this record rise, a big question is arising – is silver equal to or surpassing gold in investment?
Industrial demand changed the picture
Experts believe that the biggest reason for the rise in the price of silver is its increasing industrial demand. Sectors like electronics, solar panels, EV mobility and medical technology use silver heavily. In comparison, gold mainly depends on investment and jewelery demand. According to Navneet Damani of Motilal Oswal, the supply of silver is continuously tight and the demand is increasing every year, due to which its long-term growth potential may be stronger than that of gold. He says that green energy and industrial demand are making silver stronger.
Still the ‘safe-haven’ status of gold remains intact
Although silver’s rise is spectacular, gold still remains the world’s most reliable safe-haven. Experts say that gold has central-bank support, reserve status and deep liquidity – which silver does not have. Samit Guha, CEO of MMTC-PAMP, says that both the metals are strong in their place, but gold will remain a major source of stability in uncertain times. Akshay Kamboj of IBJA also believes that no matter how fast silver gains, it cannot become a substitute for gold because the global trust of gold is still unmatched.
Advice for investors: It is better to balance both
Experts say that the current trend of silver prices may continue for a long time, but the safe-haven role of gold always strengthens the portfolio. In examples like the Russia-Ukraine war, it was seen that when the global crisis deepens, the central banks of the countries also run towards gold. Therefore, investors are advised to make a balanced allocation between the two metals as per their risk appetite and financial goals. Silver can provide bullishness and gold can provide stability – and this combination can form the basis of strong returns in the long run.
