Silver’s Twin Power: Monetary Safe-Haven and Industrial Metal

Silver has long been prized both as a monetary metal and a crucial industrial metal.  Historically it circulated as currency and store-of-value (think silver coins and bullion), much like gold .  Today, investors still treat silver as a safe-haven asset—a hedge against inflation and financial turmoil—while industry relies on its unique properties (highest electrical and thermal conductivity, antibacterial qualities, etc.) in countless applications .  This dual role explains silver’s recent attention: it offers portfolio diversification like gold, but also direct exposure to booming green-tech demand (solar, electronics, EVs, AI) .

 

In practice, silver often trades more cheaply than gold (lower price per ounce), attracting small investors and speculative money .  Yet it tends to be more volatile: sharp rallies have punctuated crises (the 1970s inflationary surge, 2011 commodity boom, 2025 tech-driven rush) .  By contrast, gold remains the dominant monetary metal with steadier long-term gains.  In short, silver’s industrial heft fuels demand growth, while its monetary character makes it a portfolio diversifier.  We explore below why silver is currently spiking in value, its price history in India, and how investors can play this metal.

 

Why Silver Prices Are Soaring Today

 

Silver prices have exploded in the past year as multiple factors have aligned.  High inflation and aggressive monetary easing worldwide (especially by the Fed) have weakened the US dollar and lowered real bond yields, driving investors toward precious metals .  Geopolitical instability (Middle East tensions, trade wars, policy shocks) has further bolstered safe-haven demand for gold and silver .  At the same time, structural demand from clean-energy and high-tech industries is surging: solar photovoltaics, 5G and AI data centers, and electric vehicles all require silver.  Major banks now warn of a looming silver shortage as supply lags booming industrial use

 

Key drivers include:

• US Dollar Weakness & Easy Money: The Federal Reserve’s pivot toward rate cuts has sent real yields down. A weak dollar makes silver cheaper for foreign buyers, fueling demand .  At the same time, global debt levels are at record highs, raising inflation fears and prompting central banks to diversify into bullion .
• Geopolitical Risk and Inflation: Renewed conflicts (e.g. in the Middle East, Russia-Ukraine) and trade disruptions have shaken markets. Investors are flocking to “crisis trades” like precious metals. As one report notes, central banks are “ditching dollars for bullion” amid fiscal strains and uncertainty . In effect, silver benefits as a secondary safe-haven alongside gold .
• Green Energy & Tech Demand: Silver’s use in solar panels, EVs, 5G and AI is enormous. For example, each solar cell uses a tiny silver paste, and EVs require silver in circuits and battery connectors. By 2024, global PV demand for silver hit a record ~197.6 million ounces , and electronics demand (including AI infrastructure) reached ~465.6 million ounces .  Analysts note that AI data centers, solar expansion and EV production are creating “massive silver shortages” , unlike past silver spikes which were mostly speculative.
• Speculative Momentum & ETF Inflows: Retail investors and ETFs have amplified the rally. Silver’s price rally (147% in 2025 alone) drew massive fund flows, creating a momentum feedback loop . The relative cheapness of silver (versus gold) has attracted broad buying. All told, analysts point to a “perfect storm” of weak dollar, easy Fed policy, investor frenzy and tight physical supply underpinning the surge .

 

These combined forces explain why silver recently pierced $100/oz (surpassing pre-2011 records) .  In early 2026 silver traded around $110/oz, even as gold neared $5,100/oz .  (The gold/silver ratio tightened to ~50:1, a multi-year low , reflecting silver’s outperformance.)

 

Historical Silver Prices in India (₹ per gram, 1971–2024)

 

Silver in India has followed a multi-decade trajectory shaped by global shocks and domestic policy. RBI data (via Upstox) shows that the rupee price of silver was just ₹0.56 per gram in 1971–72 (when India’s markets were heavily controlled).  Through the 1970s, silver in Mumbai traded at a discount to the world price due to import limits and weak demand .  The global silver boom of 1979–80 (Hunt brothers crisis) pushed silver up worldwide, but India’s prices rose only modestly (to ~₹2.62/g by 1980–81) .

 

In the 1980s and 1990s, demand and rupee depreciation changed the picture.  By 1989–90, silver averaged about ₹6.84/g in India —far above the world price—reflecting liberalized imports, surging jewellery demand, and a weakening rupee .  That premium became almost structural by the mid-1990s .  Silver hit a nominal peak in 1993–94 (around ₹7.08/g) before moderating in the late 1990s.

 

After 2000, silver rose steadily: about ₹7.87/g in 2000–01, breaching ₹10/g by 2004–05 and ₹11.83/g by 2005–06 .  A global commodities boom in 2010–11 saw silver in India jump to ~₹25.3/g (2009–10) and ₹37.3/g (2010–11) . Prices then fell off in the 2010s (hovering in the ₹20–30 range) before spiking again with recent inflation and demand: around ₹59.3/g in 2020–21 and roughly ₹72.2/g in 2023–24 .

 

These key data points illustrate the trends:

Period	Price (₹/gram)	Economic Context
1971–72	0.56	Post-Bretton Woods; strict import controls .
1979–80	2.62	Global silver mania (Hunt brothers), but limited impact in India .
1989–90	6.84	High global prices; rupee depreciation; liberalization began .
2000–01	7.87	Post-liberalization; steady industrial demand growth.
2010–11	37.29	Commodities supercycle (post-GFC stimulus); record metals prices .
2020–21	59.28	Pandemic recovery, inflation fears; silver surge alongside gold .
2023–24	72.24	Current rally (inflation, green tech demand, weak USD) .

RBI data highlight that silver in India has moved from being a minor, discount-priced market (1970s) to a premium asset (1990s–present) .  The table above shows how key geopolitical and economic phases correspond to spikes in silver prices.  For example, the 2010–11 rally coincided with massive global stimulus, while the recent jump reflects the factors outlined earlier (inflation, green demand, etc.).

 

Gold vs. Silver: Choosing the Right Metal

 

Gold and silver often move in tandem, but each has distinct traits. Gold is historically the primary safe-haven: it has outperformed silver over the very long term (1925–2023 CAGR ~4.8% vs silver’s ~3.7% ) and is held mostly by investors (≈90% of gold demand) .  It has lower volatility and is easier to store large value (an ounce of gold is worth ~80+ ounces of silver, making gold “expensive per ounce” ).

 

Silver’s strength comes from its industrial leverage and affordability. Because it is mined in much larger quantities than gold (roughly 8× annual supply) its price is lower, allowing small investors to buy appreciable ounces. Silver demand is powered by industry: electronics, photovoltaics, automotive and AI use silver extensively .  Hence in a booming economy or tech investment cycle, silver often outperforms gold: “during periods of economic stability and overall growth, [silver] does better” .  Its low price means retail investors can buy “more bang for the buck,” which has fueled retail silver rallies .

 

In short, choose silver over gold if: you want exposure to industrial/green-tech themes; you favor a leveraged play on a metals bull market; or you’re a smaller investor with limited funds (silver allows easier entry than gold).  On the other hand, if your goal is core wealth preservation, inflation hedging, or ultra-low volatility, gold is usually safer. Notably, the gold/silver ratio (gold price ÷ silver price) is an important signal: it recently plunged near 50:1 (reflecting silver’s leap) .  Some investors will add both to their portfolio: gold as the ballast safe-haven, and silver as a higher-beta precious metal with extra upside in a tech-driven commodity boom.

 

Silver Demand and Supply – Global and India

 

Global silver markets are tight. The Silver Institute’s 2024 data show total demand of 1.16 billion ounces , driven by record-breaking industrial consumption.  In 2024 electronics & electrical demand hit a high (≈465.6 Moz) and solar PV fabrication used ~197.6 Moz .  Even scrap recycling (silverware, electronics) could not meet this demand, leaving supply consistently below demand for at least five years running .  In fact, Wessex Mint reports that deliverable silver inventories (London vaults, COMEX) fell to multi-decade lows by late 2025 .  Global mine production was about 819.7 Moz in 2024 , implying a structural supply deficit when compared to the ~1.2 billion oz demand.

 

In India, silver is mostly an imported metal – India is the world’s #1 consumer (about 25% of global demand) .  India meets over 80% of its silver needs through imports .  In 2025 India’s silver import bill hit a record $9.2 billion (44% higher than 2024) , straining the trade balance.  Most Indian demand comes from jewelry and industrial use.  After a cut in import duty in 2024 and robust rural income, Indian silver jewelry fabrication actually grew by ~3% in 2024 . (However, silverware/gifting fell as high prices dampened purchases .)

 

Investment demand in India has also surged. Retail buyers have turned to silver coins, bars, and especially ETFs.  Reuters reports that Indian silver ETFs saw inflows of ₹234.7 billion in 2025 (vs ₹85.7 billion in 2024) .  This shift helped investment exceed 40% of India’s total bullion demand in 2025 .  In short, India’s silver consumption is at record levels (driven by solar panels, electronics, auto sector and gold-silver substitution), and the import reliance means domestic prices often trade at a premium to global prices.

 

In summary, global supply constraints and rising tech/industrial demand underpin silver’s rise , while India’s huge market amplifies price moves through both ornament/industrial use and heavy imports .  Both factors suggest continued tightness: analysts expect India’s silver import growth (and global consumption) to stay strong if prices remain elevated.

 

Structural Growth Drivers:  The modern economy’s megatrends are silver-intensive.  Every solar panel relies on silver paste to conduct electricity . Electric vehicles use silver in their circuitry and batteries. High-speed 5G and AI computing gear embed silver in connectors and processors.  In fact, the U.S. government now lists silver as a critical mineral due to its importance in electronics and clean energy.  According to industry research, silver’s industrial demand (for PV, electronics, automotive, etc.) reached record highs in 2024 .  These structural drivers create a solid floor under prices. As Wessex Mint notes, silver’s “industrial and technological demand” – from solar, 5G, and AI – is a major factor sustaining the rally .  In short, silver isn’t just a speculative play; it is embedded in the growth of renewables and high-tech infrastructure worldwide.

 

How Indian Investors Can Buy Silver

 

Indian investors have several options:

• Physical Silver: Bars, coins, or jewelry. Buying physical silver (e.g. coins, 999 purity bars) is straightforward but requires secure storage and liquidity is lower (sellers take a premium). Storage/custody costs can erode gains.
• Silver ETFs & Fund-of-Funds (FoFs): The easiest route is through securities. India offers silver ETFs and mutual fund FoFs that track the domestic silver price. These are listed on stock exchanges (bought like stocks or via Demat). Leading schemes include: HDFC Silver ETF FoF, Axis Silver Fund of Fund, Nippon India Silver ETF FoF, Aditya Birla Sun Life Silver ETF FoF, ICICI Prudential Silver ETF FoF, SBI Silver ETF FoF, Bandhan Silver ETF FoF, Zerodha Silver ETF FoF and others . Each of these funds primarily invests in silver ETFs (which in turn hold silver bullion). They offer digital convenience: no metal purity worries, and one can invest via any broker or MF app. For example, HDFC’s FoF buys units of HDFC’s own Silver ETF, passing through silver’s price moves .
• Digital Platforms: Fintech apps make it simple. Investors can open a Demat account or use investment apps (money managers, stock apps) to buy any of the above funds. Platforms often allow lumpsum or SIP investments.  For instance, the Elefin Money app (https://download.elefinmoney.com) provides an interface to explore and invest in recommended silver ETFs and FoFs in India. Through such apps, one can compare silver funds’ performance, expense ratios, etc., and purchase them with a few clicks.

 

Real-life scenarios:  An IT professional worried about inflation might invest a portion of her portfolio in a silver FoF via an app, as a hedge. A DIY investor bullish on green energy could set up a SIP in a silver ETF FoF to tap tech-driven demand.  Even conservative investors use a small silver allocation for diversification: historically, commodities around 5–10% of one’s portfolio is often advised.

 

Recommended Silver Mutual Funds (India)

 

Below are examples of top silver FoFs/ETFs (all very high-risk, being commodity funds):

• HDFC Silver ETF FoF – A “fund of fund” that tracks the HDFC Silver ETF. Very high risk, but delivered ~300% gains in 3 years . Low expense ratio (0.18%). Suitable for long-term bullish outlook on silver.
• Axis Silver FoF – Invests in Axis Silver ETF. Also ~300% 3Y returns . Similar characteristics.
• Nippon India Silver ETF FoF – Invests in Nippon’s Silver ETF; 3Y return ~297% .
• Aditya Birla Sun Life Silver ETF FoF – Tracks Aditya Birla’s silver ETF; 3Y ~297% .
• ICICI Prudential Silver FoF – Tracks ICICI’s silver ETF; 3Y ~296% .
• Bandhan Silver FoF – A newer fund (Bandhan’s FoF) – performance still building .
• Zerodha Silver FoF – Targets Zerodha’s Silver ETF (launched 2024) .
• Others: SBI, Edelweiss, Tata, Kotak, UTI, DSP, etc. (These funds are all in Groww’s “Silver” category .)

 

Each fund’s portfolio consists almost entirely of silver ETF units.  As with gold ETFs, these offer liquidity, low expense, and no storage hassle. Investors should compare expense ratios (typically ~0.1–0.3%), fund size, and past tracking error.  Note that these funds may carry exit loads (e.g. 1% if redeemed within 15 days ), so they suit a medium-term view (3+ years).

 

Elefin Money App: To explore these options, one can use digital platforms. For example, the Elefin Money app provides detailed listings of silver ETFs and FoFs, along with tools to compare them.  Through such an app, investors can search “silver” to find recommended schemes (ETF or FoF) and invest directly in them.  This enables savvy investors to align with the silver trend without physical buying or cash management.