While gold prices have surged globally and in India — climbing 25.1% since the start of 2025 — silver has lagged, gaining just 13.5%. On Friday, silver closed at Rs.97,442 per kg on the MCX spot market. However, this underperformance is precisely why many believe silver is primed for a stronger rally.

Ajay Kedia, director at Kedia Advisory, said silver could deliver better returns than gold in the coming months, as gold's sharp rally may pause. A major indicator is the gold-to-silver ratio, which has crossed 100 for only the second time since the COVID-19 crisis. Historically, a high ratio signals that silver is undervalued relative to gold, setting the stage for a potential catch-up.

Over the past 25 years, the average gold-to-silver ratio has stood at 68, and 85 over the past decade. The current elevated levels suggest silver has significant room to climb, especially as gold's gains moderate.

The World Silver Survey 2025 by the Silver Institute supports this outlook, noting that the high ratio should attract investors to silver. The report adds that expected US interest rate cuts and ongoing geopolitical uncertainties will continue to support both gold and silver investments. However, it also warns that a slowdown in global economic growth could weigh on silver, given its heavy industrial usage.

Analysts at Julius Baer pointed out that silver’s strong industrial demand — accounting for over 60% of total consumption — has made it more sensitive to economic conditions than gold. Yet, they believe silver will still benefit from a weaker US dollar and broader investment interest.

In India, silver investment is gaining momentum through exchange-traded funds. According to the Silver Institute, silver ETF holdings in India have surged from 783 tonnes in 2024 to a record 1,200 tonnes. The number of fund houses offering silver ETFs has also tripled over the past two years, growing from four to 12.

Kedia remains optimistic about silver’s prospects, predicting that an improving global economy will lift industrial demand, further boosting silver prices. With gold already enjoying a prolonged rally, undervalued silver may now capture the attention of investors looking for the next big opportunity.