Gold has always been the most popular choice for Indians, especially during festive seasons and weddings. This year, gold remained in the spotlight, while silver is gradually gaining attention by delivering even stronger returns.
The sharp rally in both metals raises important questions for investors: Are current prices right for buying? Should one invest now or wait until Dhanteras? These questions may seem simple, but making the right decision without understanding why prices are rising and how long the rally may continue can be challenging.
In this article, we explore the trends in gold and silver to help investors make informed decisions.
What’s Happening?
Gold and silver started the week with strong bullish momentum. According to the All India Sarafa Association, silver prices in India surged to a record Rs 1.5 lakh per kilogram (inclusive of all taxes) on September 29, rising Rs 7,000 in a single session. Gold also climbed to a lifetime high of Rs 1,19,500 per 10 grams following strong global trends.
On September 30, December gold futures on the MCX rose Rs 1,217 (1.04%), while February 2026 contracts surged Rs 1,314 to hit a lifetime high of Rs 1,18,788 per 10 grams. Silver followed a similar trend, with December futures rising Rs 1,101 (0.77%) to Rs 1,44,200 per kilogram (excluding taxes). March 2026 silver contracts gained Rs 1,127 (0.78%) to reach Rs 1,45,858 per kilogram.
Global markets mirrored the rally, with December gold futures rising over 1% to around $3,895 per ounce, while silver climbed to $47.41 per ounce, marking fresh highs.
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Precious Metals Outperforming Equity
Across all time frames, YTD, 6 months, and 3 months, silver is outperforming not only gold but also the equity market. On a YTD basis, while the Nifty50 has risen around 3.66%, gold surged 43.24%, and silver outshone both with a remarkable 56.15% return.
Similarly, over the past month, the Nifty recorded a negligible 0.40% gain, while silver and gold delivered strong returns of 13.51% and 9.33%, respectively.
Why Silver Is Rallying
- Sharp movements compared with gold create urgency and a Fear of Missing Out (FOMO) among investors.
- Serves as both a precious and industrial metal, used in solar panels, electronics, and electric vehicles, pushing prices higher.
- Demand is rising with the global shift to renewable energy and high-tech manufacturing.
- Lower price than gold makes it accessible for individual investors, boosting buying pressure.
- Supply deficits for the fifth consecutive year tighten availability and support prices.
- Geopolitical tensions and production challenges in major silver-producing countries add to the supply crunch.
Why Gold Is Rallying
- Expectations of interest rate cuts increase demand, as lower rates make gold more attractive for wealth protection.
- A weaker US dollar boosts global buying, making gold cheaper for other currencies.
- Fears of a US government shutdown and stalled budget talks may delay key economic data, increasing market uncertainty and driving demand for safe-haven assets.
- Gold ETFs have seen rising inflows, reaching their highest level since 2022, reflecting strong investor interest and supporting the ongoing rally.
- Central banks, including China and Russia, along with large institutions, are increasing gold reserves.
Should Investors Wait or Buy Gold/Silver Now?
Gold is a reliable and stable investment, especially during times of market uncertainty. It performs well amid political and financial instability, protecting wealth better than most other assets. Rising fears over delayed economic data and potential rate cuts are boosting demand. Additionally, ongoing conflicts in different regions are pushing prices higher.
However, buying at record highs carries risks. Long-term investors seeking a hedge against uncertainty may still consider gold and silver as safe choices. Investors should avoid putting all capital in at once. A staggered buying approach makes sense, allowing additional purchases during near-term price corrections.
What’s Next?
Motilal Oswal Financial Services expects Comex silver futures to test $50 per ounce, having already crossed $45. Adding to optimism, Robert Kiyosaki, author of ‘Rich Dad Poor Dad’, predicted on social media that silver could deliver fivefold returns within a year, saying, “If I had $100, I would buy silver coins”.
*The companies mentioned in the article are for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
