For those seeking a safe investment and a hedge against inflation, gold and silver have long been favoured choices worldwide. While gold has provided excellent returns recently, silver hasn’t lagged. In 2024 alone (up to March 13, 2024), various mutual fund silver schemes have delivered an average return of 26.08%, outpacing the stock market benchmark index.
If you are wondering whether to invest in gold or silver, let’s explore why silver might be a better investment and what it means for investors.
What’s Happening ?
In 1950, the price of 10 grams of gold was Rs 99 and fast forward to 2024 the price of 10 grams of gold has crossed Rs 75,000. From an investing standpoint, this amounts to a monumental 700 times increase in the value of gold over the last 74 years.
Comparatively, silver was priced at 2,715 rupees per kilogram in 1981 and is now at 75,500 rupees per kilogram as of May 23, 2024. Both have performed well in the long term. However, according to analysts Ronald-Peter Stoeferle and Mark J. Valek’s report, ‘In Gold We Trust’, silver is emerging as a more attractive investment than gold in 2024.
Why is Silver Better Oprion than Gold?
Several factors make silver an even more attractive investment than gold. Let’s understand these reasons:
Expected Rate Cuts: The possibility of interest rate cuts by the U.S. Federal Reserve could benefit silver prices. Lower interest rates and geopolitical tensions make investments in gold and silver more attractive.
Industrial Metal: The demand for silver is increasing in industries such as solar panels and electric vehicles. Globally, about 50% of the silver produced is used in industrial sectors.
Supply Shortage: There has been a consistent decline in silver supply over recent years — 18 million ounces in 2015, 55 million ounces in 2016, and 184 million ounces in 2023. This supply shortage is driving up prices, suggesting further potential price increases.
Rising ETF Investments: Investments in silver ETFs have also increased recently, both globally and in India.
Outperforming Gold: The current gold-to-silver ratio has risen above 75, indicating that silver has recently outperformed gold.
Considering all these factors, experts see silver as a more beneficial investment option compared to gold.
What’s in it for Investors?
A robust industrial demand for silver in the coming years will make it a more attractive and profitable investment instrument compared to gold. Furthermore, with the US Fed giving signals for further rate cuts in the second half of 2024, the price of silver is set to receive a further boost. However, investments in gold and silver should align with an investor’s risk tolerance.
What’s Next?
According to Mint, silver is currently trading at around 94,300 rupees per kilogram on the Multi Commodity Exchange (MCX). Internationally, silver continues to gain due to strong fundamentals and geopolitical tensions. Some analysts predict that silver could soon surpass the 100,000 rupee per kilogram mark on MCX.
In summary, silver’s industrial demand, supply constraints, and potential interest rate cuts make it a promising investment for 2024 and beyond.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
