Mint Primer: The gold rush for silver is on. Will it persist?

As the world rushes for gold, silver is also now back in vogue. Known as “the poor man’s gold”, silver benefits from a correlation with gold, which just breached the $3,000 per ounce mark. But this time, silver’s own fundamental levers are also in motion. Mint explains:

How has silver performed?

Silver, just like gold, has extended its post-covid rally this year and returned 15% in the first three months of 2025.

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Across the globe, both these precious metals have outperformed major asset classes like equities and debt so far. In the last five years, however, silver has outperformed even gold, returning almost 178%. Gold has gained 106% during this period. Right now, silver is hovering near $34 per ounce level—still distant from its all-time high of $50 per ounce it touched back in 2011. This indicates room for a further rally in silver prices, according to experts.

What has driven silver’s rally?

Several factors have contributed to the post-pandemic rush for silver. Safe haven demand remains a key driver. From the Ukraine-Russia conflict to ongoing tariff and trade war concerns, investors have always had reasons to increase their bets on precious metals in the last five years. A spike in silver demand in the renewable energy and electric vehicle industries, along with a contraction in supply, also supported prices. With global interest rates falling and the US dollar weaking to near five-month lows against major peers, incentives and opportunities in holding non-yielding precious metals have increased.

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Do silver prices always follow the trend in gold?

The correlation is not foolproof. Silver prices tend to be highly volatile and depend on traders’ perception of the metal’s industrial demand outlook. While gold prices are more stable owing to buying interest from central banks, a bet on silver is an amplified bet on gold, making it prone to higher volatility but not necessarily higher returns in the short run.

What is the outlook for silver prices?

If the bullish momentum continues, COMEX silver could reach $40 per ounce, while MCX prices may rise to ₹125,000 per kg within the next three to four months, said Kaynat Chainwala, associate vice president of commodity research at Kotak Securities. Supported by safe-haven demand and interest rate cut expectations, a recovery in Chinese demand could improve the industrial outlook and drive gains, potentially causing silver to outperform gold in the near future, she added.

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How should investors approach silver?

Investors can gain exposure to silver through futures contracts traded in the Multi Commodity Exchange of India or exchange-traded funds by mutual funds. However, they must have a high tolerance for volatility, said experts. Dubbed the “devil’s metal”, silver has a history of extreme erratic behaviour during industrial demand headwinds. Blind bets just based on gold price are ill-advised as the correlation is unstable. Right now, a tempered bet on silver seems fruitful in the long run, said Chainwala.