Gold vs Silver: Which is Better as an Investment?

Gold and Silver’s Value Appreciation

Over the past decade (2014-2024), gold prices rose 11% annually on an average. Silver? A volatile 9-12%, with a few swings, rose by a massive 40% in 2020.

Why the Difference?

Gold's primary driver is investment demand,it's a store of value, crisis hedge and portfolio diversifier. Silver splits between investments and industrial usage. Thus silver is sensitive to both economic uncertainty and manufacturing cycles.

We can infer that gold offers steadier, more predictable returns. Silver delivers higher volatility with chances for high gains during industrial booms and losses during recessions.

Volatility of Gold & Silver

Gold's daily price movement is around 2-3%. Silver routinely moves 4-6% in a day, sometimes spiking 10%+ during high volatility.

This volatility is the result of silver's smaller market size. Global gold market capitalisation exceeds $12 trillion whereas silver’s is just around $1.5 trillion. High volume institutional trades move silver prices significantly. Same trade volumes, gold absorbs with minimal impact.

Industrial Demand

Gold's primary use is jewellery (50%) and investment (40%), with minimal industrial application. Silver is fundamentally different. 60% goes to industrial uses including electronics, solar panels, medical equipment and batteries.

This industrial demand makes silver responsive to economic growth. When GDP expands, manufacturing rises, and silver prices follow. The global inclination toward renewable energy particularly benefits silver. Each solar panel contains 20 grams of silver. With solar capacity expected to rise steadily over the next few years, silver’s demand is expected to rise.

Liquidity

Try selling 1 kg of silver in India. You will probably have to visit multiple dealers, face skeptical buyers. Sell 10 grams of gold? Every jeweller, bank and even pawn shop competes for your business. As of Oct 2025, with ₹ 1.25 lakhs, you can buy around a kg of silver or 10 grams of gold. Both holding and selling 10 gms gold is easier than 1kg silver.

Moreover, silver's physical bulkiness creates storage challenges. A ₹1.25 lakh gold investment weighs 10 grams (prices used for example, they may vary from time to time) the equivalent silver investment weighs 1 kilograms (approximately), 100 times heavier. Storage, transportation and security costs favour gold slightly.

Affordability and Accessibility

Silver's lower price point makes it accessible to smaller investors. In India, as of Oct 2025, you can buy meaningful silver quantities for Rs.10,000, with this same amount, you cannot even buy a gram of gold; less than a gram .

However, both metals are now accessible from ₹100-500 through ETFs, levelling the affordability playing field.

The affordability argument matters primarily for physical metal buyers preferring tangible assets.

Ways to Invest In Gold & Silver

How to Buy Gold,

• Can buy through ETFs like for eg, SBI Gold ETF, HDFC Gold ETF. They have expense ratio 0.5-1%
• You can buy Sovereign Gold Bonds and gain2.5% annual interest. Capital gains in gold are tax-free after 8 years
• You can buy Digital gold through Fintech platforms
• Can buy physical gold in the form of coins, bars from banks or jewellers or even ornaments

How to Buy Silver

• Silver ETFs are available for investment like Nippon India Silver ETF, Axis Silver ETF (expense ratio 0.6-1%)
• Physical silver can be bought in form of coins, bars, utensils and ornaments.

Thus, gold offers more investment options. Silver is primarily accessible via ETFs or physical, with ETFs being the cost-efficient choice.

So, What's better? Gold or Silver?

For most Indian investors, gold and silver are both alluring, however, gold is still more favoured given the festive importance. Gold delivers stability, liquidity, cultural acceptance and predictable performance. It's crisis insurance that works when you need it most. Silver as an investment serves as a tactical, correlated with economic demands and hence slightly volatile compared to gold. But in the era of economic boom, we can surely bet on this metal.