Should you invest in silver instead of gold now?
The recent World Silver Survey also pointed out that "Silver should gain from the 'best of both worlds' narrative
Gold and silver are gaining traction again after weeks of consolidation and correction this year. In fact, bullion prices have witnessed strong buying last week, thereby hitting 10-week high levels. However, silver seems to be glittering more than gold.
Silver prices inched higher about 6% last week to settle at Rs 71,500 per kg on improving demand outlook and hopes of global economic recovery.
Today, Gold prices on MCX gained 0.36% to trade at Rs 47,925 per 10-gram, while MCX Silver July futures rose 1.14% to trade at Rs 72,245 per kg in the afternoon trade.
Is Silver the new Gold?
Recent bull runs too have recorded a significant outperformance by Silver. From 2001 to 2011, while Gold rose sharply by 636%, Silver rallied a whopping 904% over the same period.
In the year 2020, when the world was grappling with the unprecedented crisis leading to uncertainties on the economic recovery, investors turned to bullion for safety. In 2020, Gold prices rose by a 28.2%, while Silver prices recorded a surge of 45.8%.
Even in 2021 year-to-date (YTD), Silver prices have increased 6.04% while Gold has given a negative return of 4.45%.
According to experts both metals have a strong outlook, but they are more bullish on silver.
Anuj Gupta, Vice President Commodity and Currency Research at IIFL Securities said, “Silver will outperform Gold going forward as Silver is taking cues from industrial metals and industrial demand amid economic recovery. Investors must look to invest to tap good returns.”
The recent World Silver Survey also pointed out that “Silver should gain from the ‘best of both worlds’ narrative. Silver will benefit both from its precious metals credentials, against the backdrop of low interest rates and concerns about inflation, and its industrial metal ones, given a synchronized post-pandemic recovery.”
The survey also said that 2021 will be another strong year for silver investments. Demand for bars and coins is forecast to rise. Also It expects Silver to rise to a peak of $32 later in the year.
Where you should invest:
Vandana Bharti, AVP, Commodity Research at SMC Global
It is better to invest in Silver as it has properties of both on gold and base metals and both counter are on run. Hence it may outperform gold in coming days as well. On MCX, one can easily target 74,000-75,000 while on comex it is eyeing the crucial level of $30. It is advisable to for Silver on dips.
Anuj Gupta, VP, Commodity and Currency Research at IIFL Securities
Silver appears to be scoring over gold. Given the industrial demand the rally in base metals. Expect the white metal to test levels of Rs 80,000-85,000 by year end. Investors should have 20 to 30% of their total investment in bullions. And out of that, Silver should constitute at least 50% of total investment in bullions.