Silver up 61% in 9 months: The metal is quietly outpacing gold in 2025

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While gold has dominated headlines for its record-breaking rally this year, silver has been quietly staging one of the most spectacular comebacks in decades. Starting 2025 at just $28.92 an ounce, silver surged to over $46 by late September — a stunning 61% gain in less than nine months. For Indian investors, rupee depreciation has amplified these returns even further, making silver one of the hottest assets of the year.

 

Tata Mutual Fund in its latest report explains what’s driving silver’s rally:

 

Unlike gold, which is largely driven by safe-haven demand, silver has a unique dual role as both a precious and industrial metal. Around 60% of global silver demand comes from industrial usage, and this year, several key factors have come together to push prices sharply higher:

 

Industrial Demand Explosion

Silver is critical in solar panels, electronics, and electric vehicles — sectors seeing rapid global growth. As China’s economy shows signs of recovery, industrial consumption of silver is soaring. Analysts note that the supply deficit in silver has widened, with demand consistently outpacing new supply.

 

US Fed Rate Cuts

The US Federal Reserve’s 25 bps rate cut in September 2025 provided a major tailwind, weakening the dollar and boosting precious metal prices. Expectations of another cut in October have further fueled silver’s momentum. Historically, falling interest rates and a softening dollar make silver (and gold) more attractive.

 

Rupee Depreciation

India imports over 92% of its silver, which means a weaker rupee makes the metal costlier domestically. While this adds to inflationary pressure, it also magnifies returns for Indian investors compared to their global peers.

 

Gold-Silver Ratio

The gold-silver ratio — a key indicator of relative value — has slipped from 85 in early September to around 81, signaling that silver is outperforming gold. Experts predict the ratio could drop towards 75 in the coming months, reflecting silver’s relative strength.

 

Can silver outperform gold?

 

Experts at Tata MF believe silver may continue to outperform gold over the medium term. According to house views from wealth managers, the silver story is being powered by:

 

Persistent supply deficit projected for the fifth straight year.

 

Industrial recovery in developed economies.

 

Favorable gold-to-silver ratio, indicating further upside potential.

 

Strong central bank buying of precious metals boosting overall sentiment.

 

That said, silver remains far more volatile than gold. Short-term swings can be sharp, making it better suited as part of a diversified allocation rather than a core holding.

 

What should investors do?

 

"We believe strong investment demand, large Silver supply deficit and Fed cuts may continue to support Silver prices over the medium to long term for three to five years horizon. Silver may outperform Gold in the medium term with favorable Gold/Silver ratio, recovery in developed economies, strong industrial demand especially from China, and global supply deficit projections. Silver is a developing growth story, and the trend is highly depended on broad recovery in industrial demand. Investors should be mindful of short-term volatility and macro headwinds," noted the report.

 

 Tata Mutual Fund’s outlook suggests silver may outperform gold over the medium term (3–5 years), although investors should be mindful of short-term volatility.

 

Financial planners suggest that silver should be seen as a strategic addition rather than a speculative bet. Here’s what to keep in mind:

 

Allocation: Limit exposure to around 5–10% of your overall portfolio, often as part of your precious metals bucket alongside gold.

 

Investment routes: Instead of buying physical silver, which comes with purity and storage challenges, investors can consider silver ETFs, silver mutual funds, or digital silver platforms.

 

Long-term view: Silver’s industrial demand, especially in renewable energy and EVs, makes it a promising long-term play. But brace for volatility and avoid chasing peaks.

 

Diversification: Pairing silver with gold can provide balance — gold as a crisis hedge, silver as a growth-driven play.