Silver is emerging as a sought-after asset, with investors pouring money into exchange-traded funds (ETFs) tracking the metal as they seek diversification in a volatile market.
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Silver exchange-traded funds (ETFs) in India have seen explosive growth. By the end of February 2025, the number of silver ETFs had risen to 12, with the monthly average assets under management (AUM) surging to ₹14,017.53 crore—more than triple the ₹4,069.90 crore held by 11 ETFs a year earlier, according to Prime Database.
The momentum hasn’t slowed. March saw two more ETF launches—one from Zerodha Fund House and another from 360 ONE Asset—underscoring the rising investor interest in silver as both a safe-haven asset and an industrial powerhouse.
India’s capital markets regulator, the Securities and Exchange Board of India (Sebi), first allowed asset managers to launch silver ETFs in 2021. Since then, demand has steadily climbed, and analysts say the rally is far from over.
Beyond investment: Silver’s industrial edge
Long valued as a safe-haven asset, silver is also a crucial material for high-growth industries.
Silver is not just a precious metal—it is the best conductor, even better than aluminum, making it a key player in next-generation industries, notes Raghav Iyengar, chief executive, 360 ONE Asset. The metal is critical to solar panels, electric vehicle (EV) batteries, medical equipment, and water purification technologies.
Beyond its industrial uses, silver is gaining traction as a reserve asset. Last year, Russia’s central bank announced plans to add silver to its reserves for the first time, expanding beyond gold, platinum, and palladium. Analysts believe other central banks could follow suit as they seek diversification beyond gold.
Will silver outshine gold?
The gold-to-silver ratio—a measure of how many ounces of silver it takes to buy one ounce of gold—currently stands at 78:90, suggesting that gold may be overvalued relative to silver, Iyengar noted.
At a time when central banks are looking beyond gold to diversify their reserves, silver may emerge as a promising store of value, he said.
Meanwhile, supply constraints are adding to silver’s allure. The global silver market is projected to run a deficit for the fourth consecutive year in 2024, meaning demand continues to outstrip supply, according to ICICI Direct Research. Such deficits have historically been a strong driver of price gains.
Silver’s rally is already well underway.
The metal has climbed 13% on the Multi Commodity Exchange (MCX) year-to-date and has surged 32% over the past year. On 22 March, silver traded at ₹73,890 per kg—by March 24, it had jumped to ₹97,209.
ICICI Direct expects the rally to continue, forecasting silver prices to reach ₹1,10,000 per kg in 2025.
In the global markets, silver is hovering around $34 per ounce—still far from its all-time high of $50 per ounce, reached in 2011.
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Despite silver’s strong outlook, caution is warranted.
Silver will likely outperform gold in percentage terms, but investors should be mindful of its volatility, said Manav Modi, senior analyst, commodity research at Motilal Oswal Financial Services.
Modi forecasts silver could climb to ₹1,11,111– ₹1,25,000 in the domestic market over the next 12–15 months. Assuming a dollar/rupee exchange rate of 87, he expects global silver prices on Comex to reach $37.5–$42.2 in the same period.
Unlike gold, which is primarily a monetary asset, silver has a dual identity as both a precious metal and an industrial commodity. That means its price is influenced not just by macroeconomic factors such as inflation and interest rates, but also by shifts in base metal markets.
Silver tends to be more volatile due to its industrial demand, Modi noted, adding that while exposure to silver makes sense, replacing gold entirely would be a riskier move.
The road ahead
With inflation risks, falling global interest rates, and rising geopolitical tensions, both gold and silver remain key hedges. But silver’s strong industrial demand could give it an edge.
Nirav Karkera, head of research at wealthtech startup Fisdom, notes that silver’s link to high-growth sectors—including EVs, renewable energy, and medical technology—strengthens its long-term investment case.
Global industrial and manufacturing supercycles will continue to drive silver demand, he said, pointing to its role in automobiles, solar panels, chemicals, and energy storage.
India’s expanding manufacturing footprint and capital expenditure push will further support metal demand. While silver may not be the primary driver, it is poised to be a crucial contributor to this growth, Karkera added.
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With structural demand from both investors and industry, silver’s rally may have further room to run. The question now is not whether silver has a place in investment portfolios—but just how big that place should be.