Despite its sharp rise, silver is still the devil's metal

Silver, once derided as the "poor man's gold," is having its moment in the sun.

- Abhinaba Saha [e-mail]

With a stunning 43% rally this year, it has outperformed gold's 37% surge, grabbing the attention of investors. Currently, spot silver on the Commodity Exchange Inc. (Comex) is trading at $42.5 per ounce, still shy of its $50 peak in 2011.

But don't be fooled by the shine-experts say that silver's shimmer may prove fleeting, with turbulence likely over the next couple of quarters amid global uncertainty. "Silver may not rise at the same pace over the next three months,"said Anil Ghelani, head of passive investments and products at DSP Mutual Fund.

Prices may consolidate near $40 per ounce, but strong momentum leaves room for further long-term gains, he added.

Often dubbed the "devil's metal", silver has a history of extreme erratic behaviour during industrial demand headwinds.

According to experts, investors endured losses from 2012 to 2020, waiting eight years to break even.

It lost nearly half of its value between 2013 and 2015, with prices falling consecutively for three years, showed Bloomberg data.

They recommend a cautious, staggered approach to silver as lump-sum bets could expose investors to unsettling volatility.

"Silver works as a portfolio diversifier, but only in moderation. Chasing it for FOMOdriven outsized gains is a risky bet," Kaustubh Belapurkar, director of fund research at Morningstar India, said.