Silver is giving gold a run for its money

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If you have gold placed on one side and silver on the other and you have to choose one, you might not be able to ignore the shine of this ‘yellow metal’. There’s something special about it.

But if we say that your decision is wrong because in the long-term investment, silver could outperform gold.

Then if you miss investing in silver, you might be missing out on a big opportunity. To what level can silver rise and how should you invest in it, find out here.

At the beginning of 2024, when silver was ruling around Rs 72,000 per kg in the Delhi bullion market, which has now crossed Rs 90,000/kg.

By May 20, 2024, gold has given a return of 16 percent and silver has given a return of more than 22 percent.

Broking firm Motilal Oswal expects silver to outperform gold in the long run. On an annual basis, till May 2024, both assets, gold and silver, have given positive returns.

In recent days, concerns over supply and demand have not had much impact on gold prices. This trend has been observed despite the volatility in the stock market. The report states that there is more fluctuation in gold prices during an election year.

This year, elections are being held in over 40 countries, including India and America, indicating a possibility of a decline in gold prices.

You can invest in gold and silver if prices fall. What will be the outlook for gold and silver in the next five years?

Ajay Kedia, Director of Kedia Advisory, shares his views on this. He says that by the end of this year December, silver prices may reach Rs 1 lakh. If aggressive demand continues, these prices may go up to Rs 1.20 lakh per kg. While the price of gold may touch the level of Rs 90,000.

Kedia says that for the past few years, gold and silver have given double-digit returns on average. We can see these returns going forward as well.

A major surge could be seen in gold prices over the next two years. After that, there will be a mild rise. Over the next five years, gold could reach the level of one lakh rupees.

As for silver, with an increase in industrial demand and investment, it could double from the current levels. Thus, over the next five years, gold could give a return of 33 percent, and silver could give a return three times higher, around 100 percent.

Now, the question is, why is silver rising?

Is it just due to the weakness of the dollar that silver has surged, or are there other reasons?

Actually, silver is not only a precious metal but also an industrial commodity.

It is used in various industries around the world. Its consumption is higher in the electrical and electronics industry. In recent days, there has been a strong increase in the global industrial demand for silver, which is the reason behind the surge in prices.

According to figures from the American institution Silver Institute, global industrial demand for silver increased by 11% to 20,354 tonnes during 2023. Prior to this, in 2022, this demand was 18,298 tonnes.

Along with the increase in industrial demand, the supply of silver also remained low in 2023. And there is a possibility of demand increasing during 2024 as well.

This is the reason behind the sharp rise in silver prices.

In such a scenario, the question is, if you want to make money by investing in silver, what is the right way to invest?

Personal finance expert Jitendra Solanki says that currently, there is no mutual fund option for investing in silver.  At present, investing in silver through ETFs is a good option. Instead of lump sum, invest in silver ETFs in installments gradually.

For investing in gold, you can choose gold funds, gold ETFs, and Sovereign Gold Bonds (SGBs). You can include up to 15 percent of gold and silver in your portfolio.

It is a golden opportunity to invest in silver. Looking at past figures, silver has seen big ups and downs.

Therefore, there is a big risk involved in this investment. Do not invest your entire amount in silver alone in the greed for huge profits.

To avoid any major risk, seek help from your financial advisor.

(Disclaimer: Stocks recommendations by experts or brokerages are their own and not those of the website or its management. Money9.com advises readers to check with certified experts before taking any investment decisions.)