Page 55 - Banking Finance June 2025

ARTICLE

Gold Grabs

Headlines, But Is

Silver the Real

Star in 2025 Satish Dondapati

Fund Manager
Kotak Mahindra AMC

Gold has been in the spotlight with its record-breaking rally, surpassing the Rs.88,310 per 10 grams
mark for the first time, as geopolitical and economic uncertainties drove investors toward the safe-
haven asset. Meanwhile, silver also reached a new high of Rs.1,01,999 per KG in 2025 reflecting
growing demand and its dual role as both a monetary and industrial metal.

G old has been in the spotlight with its record-break- surged nearly 63%, outpacing gold's gains. A similar trend
ing rally, surpassing the Rs.88,310 per 10 grams
appears to be emerging in 2025. While gold touched a yearly
mark for the first time, as geopolitical and economic
uncertainties drove investors toward the safe-haven asset. high of approximately 26% in 2024, silver quietly climbed
34%, setting the stage for a potential repeat of its past
Meanwhile, silver also reached a new high of Rs.1,01,999 outperformance.
per KG in 2025 reflecting growing demand and its dual role
as both a monetary and industrial metal. Silver has long played a dual role-both as a safe-haven asset
and as a critical industrial metal.
Historically silver is referred as the "poor man's gold". How-
ever, silver plays a significant role in various industries, in- Silver's Industrial Demand Fuels a Bull-
cluding electronics, renewable energy, and high-tech manu-
facturing. Silver may surpass gold's performance in the com- ish Outlook
ing quarters. While gold remains a strong asset, silver's Unlike gold, whose value primarily comes from its role as a
industrial demand, relative undervaluation, supply concerns monetary metal, silver is deeply embedded in modern tech-
and monetary appeal could set it up for better gains. If nology. More than half of global silver demand comes from
these trends continue, silver may outperform gold in com- industrial applications, such as electronics, solar panels, and
ing quarters. electric vehicles (EVs). According to the Silver Institute, in-
dustrial silver demand is expected to exceed 700 million
Silver's Historical Outperformance in ounces in 2025, positioning it as the primary driver of price
growth.
Bull Markets
Silver has a history of outperforming gold in most precious The clean energy revolution also provides a significant
metals bull markets, predominantly as the rally peaks. In tailwind for silver. The solar industry alone accounts for
2020, amidst pandemic-driven uncertainty, silver prices nearly 15% of total silver consumption, with demand ex-

50 | 2025 | JUNE | BANKING FINANCE