As Dhanteras approaches, marking the beginning of India’s festive season, investors traditionally look towards gold and silver for their investment portfolios. This year, however, the spotlight has turned to silver, which has not only outpaced gold in terms of returns but has also emerged as one of the most resilient investment options amidst global uncertainties.

Record Highs and Unmatched Returns: A Silver Surge

Over the past year, precious metals have seen an impressive rally, consistently setting new all-time highs. While both gold and silver have benefited from this upward trend, silver has outperformed gold, delivering remarkable returns to investors. According to a report by Motilal Oswal Financial Services Limited (MOFSL), this upward trajectory in silver is expected to continue, with projections indicating a potential to surpass gold once again in the coming year.

Gold’s Performance Over the Past Year

Data reveals that gold prices on Dhanteras 2023 stood at INR 60,117 per 10 grams. Fast forward to this year’s Dhanteras, and the price has risen to around INR 79,000 per 10 grams, representing an impressive 30% return. Key drivers of this growth include global instability—particularly in the Middle East—and an increasing demand for safe-haven assets, positioning gold as a reliable investment.

Silver Takes the Lead

Silver’s performance over the last year has been even more impressive. On Dhanteras 2023, the price of silver was approximately INR 70,100 per kilogram. By this year’s Dhanteras, it has soared to about INR 98,000 per kilogram, rewarding investors with a remarkable 40% return, outpacing gold. Industry experts anticipate this trend to continue, with MOFSL forecasting that silver prices on the MCX could reach INR 125,000 per kilogram in the next 12 to 15 months.

Why Silver? Safe Haven and Industrial Demand Fuel Growth

MOFSL attributes silver’s robust performance to its dual role as both a safe-haven asset and a high-demand industrial metal. With industrial applications in electronics, renewable energy, and medical devices on the rise, silver has gained significant traction as an attractive investment. This dual demand—safety for investors and necessity in industry—gives silver an edge, particularly during periods of economic volatility.

What About Gold? Steady Returns but Increased Volatility

While gold remains a popular choice, its performance outlook is more modest. MOFSL’s predictions place gold at around INR 81,000 per 10 grams in the medium term, with a long-term forecast of INR 86,000 per 10 grams. However, gold’s demand is expected to decrease slightly due to high prices. Diwali usually sees gold sales peak at 700 to 800 tons, but this year, demand may dip to 400–500 tons due to inflated prices, with a potential 40–50% drop in gold sales.

A Five-Year Perspective: Silver’s Consistent Rise

Over the past five years, gold has delivered a total return of 103%, cementing its place in Indian households and investment portfolios. Historically, gold prices tend to see a positive run-up during the festive season. Since 2011, only twice—2015 and 2016—have prices dipped in the 30 days leading up to Diwali. And while the trend of higher profits before Diwali has generally held, this year, silver has stolen the show as the clear leader in returns.

Outlook for Investors: Silver Set to Sparkle in 2024

With its rising industrial demand and appeal as a safe-haven asset, silver continues to demonstrate its potential for growth in uncertain times. For those considering a precious metals investment this Dhanteras, silver presents a compelling case, not only as a hedge against inflation but also as an asset with high growth potential.