Silver has gained with an even higher fervour but it still remains undervalued and offers higher potential returns than gold. This is reflected in the gold-to-silver ratio which is currently hovering over the 90 mark against the historic average of 50-80.
Bullion, long regarded as a safe haven, has truly lived up to its reputation in 2025—a year marked by heightened uncertainty on multiple fronts. Both gold and silver have posted impressive gains, outperforming most major asset classes, including cryptocurrencies like Bitcoin. Persistent trade tariff threats and geopolitical tensions have kept global economies on edge, driving investors toward traditional stores of value.
While gold has maintained its allure as a hedge against volatility, its rapid rise has sparked debate over whether it still offers value at current levels. Meanwhile, silver, often overshadowed by its more glamorous counterpart, has outpaced gold’s performance this year, prompting renewed interest in its potential to deliver superior returns and added portfolio diversification.
Silver’s near 30 per cent returns on the year-to-date basis, are marginally higher than gold’s 27 per cent returns for this year so far. Meanwhile Bitcoin has risen by 26 per cent in the same period.
While gold is a store of value and is a global hedge like the US dollar – the most powerful currency in the world, silver is often seen as an alternative for less affluent people. But it scores over gold because of its industrial appeal which makes this precious metal prized commodity, though very volatile.
Pricier who? Gold or Silver
The Yellow metal has had a great run over the last three years with double-digit returns in each of these years. When 2025 started, its price in the domestic market was estimated between Rs 84,000 and Rs 90,000 per 10 grams. But it is now hovering around Rs 1 lakh per 10-gram mark, surpassing all estimates.
Silver has gained with an even higher fervour but it still remains undervalued and offers higher potential returns than gold. This is reflected in the gold-to-silver ratio which is currently hovering over the 90-mark against the historic average of 50-80.
The gold-to-silver ratio also called the gold/silver value ratio, is a measure of how many ounces of silver are required to buy one ounce of gold.
Why silver trumped gold in 2025?
Gold’s performance has been solid in the backdrop of geopolitical conflicts, high US debt, and market volatility. Its gains have been tempered by shifting expectations around interest rates: periods of stronger US economic data have led to short-term dollar strength, weighing on gold. Additionally, after several years of strong performance — gold rose nearly 30 per cent between 2019-2023 — some investors took profits early in 2025.
On the other hand, silver has more than just its safe-haven appeal going for it. Unlike gold, silver is a critical industrial metal, with nearly 50 per cent of demand stemming from industrial uses including solar panels, electronics, 5G devices, and electric vehicles (EVs). The global push for green energy — spurred by new government policies, corporate ESG commitments, and rising consumer adoption of EVs — has supercharged silver’s demand profile. This industrial tailwind has given silver an edge over gold, whose primary use remains as jewellery or a monetary asset.
Another key factor has been silver’s higher volatility and beta relative to gold. This can be a double-edged sword.
Industrial Demand, a long-term catalyst for silver
The clean energy revolution has been a game changer for silver. Silver is essential for photovoltaic cells in solar panels, which are expected to see record installations globally in 2025. According to the Silver Institute, silver demand in photovoltaics will rise by over 15 per cent this year, reaching a new all-time high.
In the auto sector, silver’s role in EVs and charging infrastructure is increasing. New vehicle electrification targets in the US, Europe, and China mean higher silver consumption per vehicle compared to traditional internal combustion engines.
By comparison, gold’s industrial use is negligible, and its demand depends largely on jewellery and investment. In 2025, while jewellery demand has been stable, investment demand for gold bars and coins has been mixed as rising equity markets have drawn some investors away from defensive assets.
Monetary and inflationary tailwinds
Both gold and silver benefit from a weakening US dollar, lower real interest rates, and rising inflation expectations. In the first half of 2025, the Federal Reserve’s dovish tone and signs of slowing inflation created an environment favourable to precious metals.
various central banks, led by China, Turkey, and India, have continued to accumulate gold reserves, supporting gold prices. Meanwhile, silver has attracted more speculative inflows from retail and institutional investors betting on its industrial upside and historical tendency to outperform gold.
Silver’s supply constraints
On the supply side, silver faces tighter constraints than gold. Several major silver mines in Latin America have reduced output due to declining ore grades, labour strikes, and environmental restrictions. Meanwhile, few large new silver projects are expected to come online soon.
By contrast, the global gold mining industry has kept production stable, and while new discoveries are limited, the supply picture for gold is less constrained than silver’s.
Volatility a caveat
Silver’s higher volatility — it can move twice as much as gold in either direction — is both a risk and an opportunity.
Gold, by comparison, remains the preferred asset for conservative investors seeking a stable hedge against economic uncertainty, currency debasement, and geopolitical risks.
While silver looks well-positioned to outperform gold for the remainder of 2025, one should remain aware of its higher volatility and sensitivity to swings in risk sentiment. A sudden risk-off move in global markets, unexpected dollar strength, or rising real rates could weigh heavily on both metals, but silver would likely fall faster.