Gold Vs Silver: Yellow Metal At Record Highs, But Is Silver The Smart Bet In 2025? – News18
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Gold hit a record Rs.88,310 per 10 grams, while silver reached Rs.1,01,999 per KG in 2025. Why is prospect for silver better than gold?
While gold remains a strong asset, silver’s industrial demand, relative undervaluation, supply concerns and monetary appeal could set it up for better gains.
Gold has been in the spotlight with its record-breaking rally, surpassing the Rs.88,310 per 10 grams mark for the first time, as geopolitical and economic uncertainties drove investors toward the safe-haven asset. Meanwhile, silver also reached a new high of Rs.1,01,999 per KG in 2025 reflecting growing demand and its dual role as both a monetary and industrial metal.
Historically silver is referred as the “poor man’s gold”. However, silver plays a significant role in various industries, including electronics, renewable energy, and high-tech manufacturing. Silver may surpass gold’s performance in the coming quarters. While gold remains a strong asset, silver’s industrial demand, relative undervaluation, supply concerns and monetary appeal could set it up for better gains. If these trends continue, silver may outperform gold in coming quarters.
Silver’s Historical Outperformance in Bull Markets
Silver has a history of outperforming gold in most precious metals bull markets, predominantly as the rally peaks. In 2020, amidst pandemic-driven uncertainty, silver prices surged nearly 63%, outpacing gold’s gains. A similar trend appears to be emerging in 2025. While gold touched a yearly high of approximately 26% in 2024, silver quietly climbed 34%, setting the stage for a potential repeat of its past outperformance.
Silver has long played a dual role—both as a safe-haven asset and as a critical industrial metal.
Silver’s Industrial Demand Fuels a Bullish Outlook
Unlike gold, whose value primarily comes from its role as a monetary metal, silver is deeply embedded in modern technology. More than half of global silver demand comes from industrial applications, such as electronics, solar panels, and electric vehicles (EVs). According to the Silver Institute, industrial silver demand is expected to exceed 700 million ounces in 2025, positioning it as the primary driver of price growth.
The clean energy revolution also provides a significant tailwind for silver. The solar industry alone accounts for nearly 15% of total silver consumption, with demand expected to rise as governments strive for net-zero emissions. Additionally, advancements in artificial intelligence and high-performance semiconductors, which depend on silver’s unmatched conductivity, further boost demand. These factors position silver as one of the most sought-after commodities of 2025.
Supply Deficits Add to Price Pressure
For several years, silver has experienced a supply deficit, with demand consistently surpassing mine production. In 2024, the silver market saw a shortfall of over 200 million ounces, the largest in recent history. Experts anticipate this trend will persist in 2025, exerting further upward pressure on prices.
Source – Silver institute
Monetary Factors Driving Silver Higher
Beyond industrial demand and supply constraints, macroeconomic conditions are favouring silver. Silver shares many monetary drivers with Gold, such as inflation, central bank policies and currency devaluation.
Historically, silver tends to perform well in low-interest-rate environments due to its lower opportunity cost of holding, a weaker US dollar, inflation fears, higher industrial and investment demand. The Federal Reserve’s anticipated rate cuts in 2025 could create a favourable environment for silver, similar to previous periods of monetary easing. Additionally, raising global debt and fiscal instability enhance silver’s appeal as a safe-haven asset.
Gold-Silver Ratio (GSR)
The gold-silver ratio (GSR) has declined from its one-year high but remains elevated at over 88.9 points, compared to its long-term historical average of around 60 points. The current gold silver ratio enhances silver’s appeal as an investment opportunity. During the 2008 financial crisis and Great Recession, the GSR initially spiked to over 80:1 before falling to 30:1 as the Federal Reserve ramped up money printing. Similarly, in 2020, the GSR hit a record high of 123:1 during the pandemic before plunging to around 60:1 as central banks injected liquidity into global economies.
Source – Refinitiv
Conclusion
With industrial demand surging, supply deficits persisting, and macroeconomic factors aligning, silver is shaping up to be one of the most promising investment opportunities of 2025.
While gold remains the cornerstone of wealth preservation, silver’s dual nature as a monetary metal and industrial powerhouse positions it as a potential standout performer. Investors seeking to diversify their portfolios may find silver increasingly appealing as 2025 unfolds.
This is authored by Satish Dondapati, Fund Manager, Kotak Mahindra AMC
The views expressed in this article are those of the author and do not represent the stand of this publication.
