Gold, silver rally overheated, prefer ETFs over physical form: Analysts

Best way to invest in Gold, Silver: Analysts said investors could invest in gold and silver in a staggered manner, such as via ETFs, to manage volatility and risks

Commodity analysts have one advice for precious metal investors -- pause or, at least, go slow on your investments in gold and silver.

 

The runaway rally in gold and silver prices in the last few months that has taken both the precious metals to fresh all-time highs on Thursday, may face intensified volatility in the months ahead, and investors should look to book their gains, they suggest.

 

Those who choose to invest may do so via exchange traded funds (ETFs), rather than purchasing both the metals in physical form, they said. 

 

"A more attractive entry point for gold and silver was one or two years ago. Investing in these metals today is largely a momentum driven decision and could introduce meaningful volatility into an investor's portfolio. That said, for those considering investing into gold and silver, the key lies in managing position/allocation weightage in these metals," said Chintan Haria, Principal-Investment Strategy, ICICI Prudential AMC.

 

Silver price surpasses ₹4 lakh/kg-mark

Silver futures for March expiry crossed the ₹4-lakh per kilogram mark on the Multi Commodity Exchange (MCX) on Thursday, hitting a record high of ₹408,487/kg.

 

The blistering rally in silver, fuelled by geopolitical concerns, and tariff wars amid supply-related concerns, has lifted prices by 54 per cent in one month, over 200 per cent in six months, and 23 per cent in one year, data shows.

 

Likewise, MCX Gold futures hit a new high of ₹1,80,175 per 10 grams today, rallying 7 per cent on the commodity exchange. The yellow metal has zoomed around 29 per cent in a month, and 100 per cent in a year.

 

The "screaming and parabolic" rally in silver prices, however, may be signalling toward the end of the one-way rally, cautions a report by WhiteOak Capital Mutual Fund. 

 

This is because the Gold-to-Silver Ratio (GSR), which measures the relative value between the two metals, is suggesting a mean reversion in the white metal's price ahead.

 

Historically, the 10-year GSR has averaged close to 80:1. A drop below 50:1 leads to silver prices seeing prolonged and relatively deeper correction than gold. At current prices, the ratio has collapsed to approximately 46:1.

 

"The screaming in the silver market is the signal that the exit door is getting crowded. It may be prudent to move your capital to an asset that builds wealth, not one that simply waits for a disaster," the report said.

 

Gold, silver: Investment strategy

Analysts said investors could invest in gold and silver in a staggered manner, such as via systematic investment plans (SIPs), to manage volatility and risks.

 

Siddharth Srivastava, Head – ETF Product and Fund Manager at Mirae Asset Investment Managers (India), advised investors to tilt towards Gold which has better downside protection due to central bank buying, de-dollarisation, and low GSR.

 

Nirav Karkera, fund manager at WealthEdge PMS, added that investing via ETFs remains the most efficient and accessible method to take exposure to these metals as they offer low-cost, diversified access without the complexities of physical ownership.

 

Notably, in December 2025, silver ETFs recorded net inflows of approximately ₹4,700 crore in December 2025 -- more than double the inflows seen in November 2025 (~₹2,154 crore) -- as investor demand accelerated alongside a sharp rally in silver prices. 

 

Gold ETFs also saw record interest (~₹11,700 crore), helping push combined gold and silver ETF assets above ₹2 trillion, shows data by Association of Mutual Funds in India (Amfi).

 

"However, recent periods have revealed significant divergences between ETF prices and underlying spot prices, with silver ETFs proving especially prone to this disconnect. It is, therefore, imperative for investors to check the fund size and liquidity before picking any Silver ETF," Karkera cautioned.