The Silver Renaissance: Why Now?

The Silver Renaissance: Why Now?

Silver has traditionally held status as the “poor man’s gold” — a store of value, seldom the headline grabber. But in mid‑2025, the narrative is shifting. As of today, silver appeals not just as wealth protection, but as a key industrial metal powering green technologies. Here's what’s driving investor attention:

• Industrial demand surge: Sectors like solar, EVs, and electronics now account for nearly 60% of silver consumption.

• Record‑breaking prices: With domestic prices in India reaching about ₹1.14 lakh/kg—over 30% higher since January 1—silver is outperforming gold.

• ETF inflows: Silver funds have seen enormous investment momentum—₹39 billion in Q2 alone, even eclipsing gold ETF inflows.

Core Portfolio Roles: Does Silver Fit?

The original ET analysis puts silver through the four pillars of a core-asset evaluation—long-term growth, volatility, defense, and income—and finds it lacking. Here’s the breakdown:

1. Long‑term returns

   • Over 50 years, ₹1 lakh in silver grew to ₹77 lakh, compared to ₹2.07 crore in gold.

   • Silver underperforms gold and equities in ~80% of 10‑year periods

2. Volatility

   • Intra‑year drops of ~24%, vs ~14% for gold.

   • Major crashes (1980, 2011) took years—or decades—to recover 

3. Crisis hedge

   • Unlike gold, silver tends to fall alongside equities during downturns 

4. Income

   • No yield, rent, or dividends—silver offers no income stream .

Bottom line: Silver doesn’t tick the traditional boxes for a core asset.

But Wait—There’s a Tactical Case

Despite these drawbacks, silver's dual nature—precious metal plus industrial commodity—combined with cyclical spikes makes it ideal for tactical plays:

• Cyclical upturns: Silver moves in 8–10‑year cycles; timing is everything 

• Gold‑silver ratio: Currently over 100, historically a bullish signal when it reverts .

• Supply concerns: Global supply deficits signal potential for price rallies .

The Economic Times suggests silver may be undervalued now, and could benefit from a broader commodity supercycle .

Indian Investor Snapshot

• Silver’s outperformance: 30%‑plus gains vs. ~28% for gold this year in Ahmedabad .

• ETF inflows booming: June 2025 saw ₹20 billion, double May’s flow.

• Combined gold‑silver funds: Playing both through a single fund gives balanced exposure

Strategic Blueprint: How You Might Invest

1. Core Allocation

   • Stick with gold and equities/bonds for long-term stability.

2. Satellite Position in Silver

   • Consider a small, opportunistic slice (2–5%) based on timing indicators.

3. ETF vs Physical vs Funds

   • ETFs offer convenience; combined gold‑silver funds provide manager‑led balance.

4. Monitor Indicators

   • Keep eyes on supply deficits and gold‑silver ratio.

5. Exit Discipline

   • Identify target levels before entering each cycle to lock in gains.

Final Thoughts

Silver isn’t suited as a core investment‑grade asset—but neither is gold a growth engine. Instead, view silver as a tactical tool with cyclical upside tied to industrial transformation. The metal’s recent rally, ETF inflows, and technical signals suggest this could be a favorable environment to dip a toe in—if you’re disciplined about sizing, entry, and exit.