Gold vs silver: Which is a better investment amid geopolitical and trade uncertainties?
Gold and silver prices have gained strong momentum recently, with MCX gold rate surpassing ₹ 98,000 per 10 grams and MCX silver reclaiming the ₹ 1 lakh per kg mark.
The rally in gold prices tracks international bullion trends, driven by weak US economic data and rising geopolitical tensions. Investor demand for safe-haven assets strengthened after former US President Donald Trump renewed calls for interest rate cuts by the Federal Reserve.
Globally, gold remained firm near $3,370 per ounce amid economic uncertainty, a contraction in US services data, and the slowest private job growth since March 2023. Gold typically performs well in low interest rate environments and during times of economic distress.
On Thursday, domestic gold prices slipped marginally on profit booking after hitting an intraday high of ₹ 98,610 per 10 grams.
Meanwhile, silver prices posted strong gains, supported by both safe-haven demand and industrial use. International silver prices hovered around $34.50 per ounce — near a seven-month high — as disappointing US data weakened the dollar. On MCX, silver price rose 0.23% to ₹ 1,01,609 per kg.
While both metals have rallied amid geopolitical and trade uncertainty, silver is emerging as a promising performer, say analysts.
'Gold remains a trusted safe haven for capital preservation, although short-term corrections are likely. Silver, supported by robust industrial demand from sectors such as electric vehicles and solar energy, presents greater growth potential — albeit with higher volatility,' said Jigar Trivedi, Senior Research Analyst at Reliance Securities.
According to Trivedi, if silver prices sustain above $34.50 per ounce, it could rally towards $36. On MCX, July silver futures could climb to ₹ 1,10,000 per kg, tracking the bullish global trend. He recommends a diversified strategy with 5%–8% portfolio allocation to gold and 10%–15% to silver.
"A balanced approach allows investors to benefit from gold's stability and silver's potential upside in 2025," he added.
Ajay Kedia, Director at Kedia Advisory, pointed out that the gold-silver ratio has declined sharply from 107 to 97.
'This drop indicates a shift in investor preference towards silver, driven by expectations of outperformance. Additionally, easing US-China trade tensions and hopes of global interest rate cuts could spur economic growth and industrial demand for silver,' Kedia said.
He expects silver to outperform gold over the long term. Technically, MCX silver price may face resistance at ₹ 1,04,800. A breakout above this could push prices to ₹ 1,08,600, while support is seen at ₹ 95,000–94,000 levels.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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