Is Silver The New Gold?

Silver, an asset once considered gold's quieter cousin is now commanding investor's attention, given its extraordinary rally this year, with prices soaring to multi-year highs and shattering previous records. But does it make sense to add a touch of silver shine to your portfolio now?

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Silver has long played second fiddle to gold, but in 2025, it has started vying for the top place.

Often viewed as “the poor man’s gold”, the white metal offers both a hedge against inflation and exposure to industrial growth, creating a unique dual appeal.

The white metal saw an extraordinary rally this year, with prices soaring to multiyear highs and breaking previous records. It breached its longstanding April 2011 high of $48.70 per ounce to reach $54.08 per ounce on October 17, 2025, in the international market. In the domestic spot market, it reached a new high of ₹1,76,304 on October 14, 2025. In fact, October 2025 will go down as a landmark month for silver as it not only touched a new all-time high, but also gave the highest-ever monthly return.

This exuberance is also significant because its year-to-date (YTD) return of over 70 per cent has surpassed those of all asset classes, including equity, gold and other commodities, by a significant margin.

Says Kaynat Chainwala, assistant vice president, commodity research, Kotak Securities: “The metal’s outperformance relative to gold has been fuelled by a mix of safe-haven demand, a weakening dollar, lower interest rates, and robust industrial usage.”

Silver lease rates surged following its addition to the US critical minerals list, reflecting tightening physical supply, she adds. Lease rate is the annual cost of borrowing silver in the London Bullion Market. A higher lease rate means lower supply and vice-versa.

Naturally, it has caught the fancy of investors like never before.

THE RISE OF SILVER ETFs

Historically, the demand for gold and silver surges ahead of Dhanteras and Diwali. Also, both gold and silver have been on an upward trend, on the back of escalating geopolitical tensions and global uncertainty.

In such times, investors typically gravitate towards precious metals.