All that’s glittering is not gold! Gold prices have risen smartly, but silver has outshone the yellow metal in recent months
NEW DELHI: Gold has been rallying for the past 2-3 years due to heightened geopolitical tensions across the globe. But silver has outshone the yellow metal in recent months, rising nearly 20% since 1 April against a 6% rise in the price of gold.The silver rally comes after several months of flat returns. Between 1 April 2024 and 31 March 2025, the white metal rose barely 8%. But it shot up nearly 20% in the past three months.Analysts say silver is likely to do well because, unlike gold, it is used extensively in the industry. Key emerging sectors, including solar panels, electric vehicles and electronics are driving up demand for silver. These sectors have witnessed frenetic growth in the past few years and are likely to grow bigger in the coming years. Furthermore, silver’s antimicrobial properties are vital in medicine for wound care and water purification. The demand for silver is forecast to grow to 5,548 tonnes by the end of 2025. At the same time, global and Indian production has fallen short. According to a report by ICICI Securities, the silver market will face a deficit of 3,339 tonnes by the end of 2025. This anticipated deficit marks the fourth consecutive year that the silver market will face such a situation, which would ultimately drive silver prices up. Investors should take heed of the gold-silver ratio, which shows how many grams of silver are needed to purchase one gram of gold. The ratio is calculated by dividing the price of gold by the price of silver. It had shot up to 96 when gold prices were shooting up in late 2024, and currently stands at 92 against the long-term average of 65. It is an indicator of investor sentiment and the relative value of gold versus silver. Though this ratio may not fall to the long-term average 65, a decline to 85-90 levels cannot be ruled out.Gold silver ratio indicates silver is underpriced compared to gold
*Average figure during the quarter
