Mumbai: Precious metals have taken centre stage in global markets this year, with both gold and silver delivering extraordinary returns. Yet, despite silver’s stronger outperformance in 2025, most analysts continue to recommend a larger allocation to gold due to its safe-haven appeal and relatively lower volatility.

Record-breaking rally in 2025

In the current calendar year (CY25), spot gold prices in dollar terms have surged 47.3 per cent, touching a record high of $3,896.8 per ounce on Thursday. Silver, however, has stolen the spotlight with a 62 per cent rally to $48 per ounce, outshining not just gold but most major asset classes globally.

In Indian markets, the trend has been even more pronounced. MCX spot gold has climbed 54 per cent to ₹1,16,933 per 10 grams, while silver has surged 68.7 per cent to ₹1,44,888 per kilogram.

In stark contrast, equities have lagged. Benchmark indices Nifty and Sensex have gained just 5 per cent so far this year, while the Nifty Midcap and Smallcap indices have slipped into negative territory. Even Bitcoin, the largest cryptocurrency, has risen by only 22.2 per cent in comparison, underscoring the strength of bullion’s rally.

Drivers of the uptrend

Analysts attribute the surge in precious metals to a mix of central bank buying, escalating geopolitical tensions, and tariff uncertainties. With slowing global growth and concerns over monetary policy, investors have sought refuge in assets seen as stable value holders.

“This is an opportune moment to participate; we are still in the early innings of a long commodity supercycle,” said Harshal Dasani, business head at INVasset PMS. He recommends a balanced allocation with 60 per cent in gold for stability and 40 per cent in silver for higher beta exposure.

Gold vs silver: what analysts say

Market experts broadly agree that while both metals could see temporary corrections, gold remains the preferred investment.

  • Gold’s stability: “Steady demand is likely to keep gold prices firm; hence, gold is likely to outperform silver in the short term,” said G Chokkalingam, founder of Equinomics Research.
  • Silver’s volatility: Silver’s industrial demand story offers potential upside, but its volatility makes it riskier for conservative investors.
  • Corrections expected: “Both precious metals are due for a correction, which will not be too deep,” noted Gaurang Shah, senior vice-president at Geojit Investments, advising staggered buying during dips.

Manav Modi, analyst at Motilal Oswal Financial Services, added that any easing in tariff tensions, geopolitical risks, or rate cut expectations could trigger a near-term cool-off.

Digital vs physical gold

Investment experts strongly favour digital gold products such as ETFs and mutual funds over physical forms, citing lower storage and transaction costs, better liquidity, and ease of access.

Silver, due to its bulk and purity challenges, is even more difficult to hold physically. “ETFs and exchange-traded platforms offer a better solution,” Dasani said.

Modi emphasised that allocation should depend on investor risk profiles and horizons, recommending at least 10 per cent exposure to precious metals in a well-diversified portfolio.

Price outlook for gold and silver

Near-term forecasts remain bullish, though with expectations of consolidation.

  • Gold: ICICI Securities expects spot gold to remain supported by weak US treasury yields and a softer dollar, projecting a move towards $3,875 levels. On MCX, December gold futures are expected to rise towards ₹117,500 per 10 grams, with strong support at ₹115,200.
  • Silver: December silver futures on MCX could advance to ₹145,500 per kilogram, with key support near ₹141,700.
  • Consolidation expected: Apurva Sheth of SAMCO Securities forecasts consolidation, with silver likely to range between ₹1,35,000–₹1,45,000 and gold between ₹1,14,000–₹1,18,000 in the immediate term.

Conclusion

The sharp rise in precious metals this year has reaffirmed gold’s role as a hedge against macroeconomic and geopolitical shocks. Silver, with its higher volatility and industrial linkage, offers outsized gains but carries greater risk. Analysts remain firm that while both metals should be part of investor portfolios, gold deserves the larger share, especially in an uncertain global environment.