Physical Silver vs Digital Silver – What’s Better for Investors?

Why is Silver in High Demand?

Silver occupies a distinctive space in the country of commodities. It is a precious metal and a critical industrial resource. Approximately 60% of global silver demand comes from the industrial sectors like solar energy, electric vehicles (EVs), 5G networks, and medical technology.

For the last ten years, industrial demand for silver has increased by about 50%, including a quadrupling of the solar sector demand. As the world increasingly pivots toward clean energy and electrification, the supply demand balance for silver tightens.

According to reports, there is a reason to believe that silver could outperform gold, especially when factoring in the gold to silver ratio in 2025, which still seems low in relation to gold.

Historical silver rate trend in India 2025

Pros and Cons of Physical Silver

Throughout history, Indians have typically purchased physical silver (e.g., coins, bars, or jewellery) from either jewellers or bullion dealers, which represents an investment that provides a sense of tangibility since they can see and touch their investment, and even gift or hand it to someone if they wanted.

Pros and Cons of Digital Silver

As digital adoption increases across sectors, silver investments have also transitioned to a digital format. Silver can be invested in many different ways, none being simpler than a Silver ETF (Exchange Traded Fund) or a FoF (Exceptional Fund of Funds).

Popular platforms now provide us with a product like the Silver ETF, taking its price from domestic rates of physical silver and trading on NSE and BSE. If investors desired, they could invest in the relative FoF and use Systematic Investment Plans (SIPs), traditional money constructs associated with mutual funds. Fund houses, such as Nippon India, ICICI Prudential, and HDFC have launched silver ETFs in the last two years.

FAQs

Why is silver in high demand right now?

Due to its dual purpose as a precious metal and an important industrial component, silver has high demand. Roughly 60% of worldwide silver demand is generated from the solar energy, electric vehicles (EV), 5G infrastructure and medical technology industries. As countries focus toward clean energy and electrification, industrial demand for silver has risen 50% and domestic solar sector demand has quadrupled.

What is the current price trend of silver in India?

As of October 17, 2025, the price of silver is trading at ₹1.54 lakh/kg and peaked at ₹1.70 lakh/kg on the same day on MCX. Just 30 days prior, silver was around ₹1.33 lakh/kg, resulting in a 25.34% increase in 30 days. The historical data shows that silver has steadily increased in price since ₹95,700/kg in 2024 to ₹1,57,000/kg on October 20, 2025.

Should I invest in physical silver or digital silver?

Physical silver attracts traditional investors looking for tangible assets for storage or gift giving. However, storage costs, security risks, and resale difficulties accompany owning physical silver.

Asking price and market risks apply when buying and selling ETFs or FoFs as it becomes a digital silver purchase in today's world. Digital silver is often available through ETF or FoF so you can realise the convenience, liquidity, and real time pricing.

What are the risks of investing in physical silver?

While physical silver is a favorite among conventional investors, there are significant issues related to other forms of it. The first issue is storing large physical objects, which is a challenge and can have security risks. Another issue is buying jewellery, which they have potential making costs, and there is no guarantee you can sell/liquidate right at market rates.

What is a Silver ETF and how does it work?

A Silver ETF (Exchange Traded Fund) monitors the domestic price of physical silver and is traded on the stock exchanges, like NSE and BSE. Units can be bought and sold similar to shares. Some ETFs have a FoF (Funds of Funds) to allow investments through SIPs, just as mutual funds do.