Silver’s 200% Surge Strengthens Near-Term Outlook for Gold: Report

New Delhi - Silver’s extraordinary rally of more than 200 per cent over the past 12 months — far outpacing gold’s roughly 80 per cent rise — has created favourable near-term conditions for gold, according to a new report.

The report by Motilal Oswal Financial Services Ltd. (MOFSL) noted that the current gold–silver ratio now tilts in favour of the yellow metal following silver’s sharp and outsized run.

Silver’s strong outperformance has led to a “significant compression in the gold–silver ratio, which has declined from pandemic highs of 127 to around 50 at the start of 2026,” the report said. This recalibration indicates that while the long-term outlook for precious metals remains positive, the near-term risk-reward dynamics may now favour gold.

“While we remain constructive on both metals and silver continues to have long-term upside supported by industrial demand and tight physical market conditions, the recent rally has also raised near-term volatility,” said Navneet Damani, Head of Research – Commodities, and Manav Modi, Commodities Analyst at MOFSL.

Damani added that during phases of sharp silver outperformance, increasing allocation to gold can help manage portfolio volatility while maintaining exposure to precious metals.

The report highlighted that silver has exhibited sharper price swings, whereas gold continues to offer relatively greater stability, making it a preferred near-term hedge amid uncertain market conditions.

Silver’s steep rise — from around Rs 60,000 to nearly Rs 3,20,000 — may now be followed by a period of consolidation at higher levels, or increased rebalancing by market participants, the brokerage said. It clarified that this outlook does not represent a negative view on silver, but rather a risk-managed reallocation strategy after a strong upward move.

In terms of flows, global silver ETFs recorded outflows of more than 3 million ounces in 2026, while gold ETFs saw relatively steadier inflows.

The report also pointed to expanding global liquidity, citing rising money supply in major economies such as the US and China, with China’s money supply growing over 8 per cent year-on-year. Such conditions have historically supported demand for safe-haven assets like gold.

— With inputs from IANS