Synopsis: Motilal Oswal sees gold as the safer play after silver’s 300% rally, a low gold–silver ratio near 50, silver ETF outflows, and MCX prices rising from Rs. 60,000 to Rs. 4,04,500, increasing volatility and profit-taking risks.
Silver has rallied in an extraordinary fashion over the course of the last year, having gained more than 300%. Therefore, this indicates a lot of interest by investors, combined with supply shortages. However, with a price increase of this level and at this rate, it often changes the near-term Risk-to-Reward balance.
The prices of Silver have priced in much of the positive news that has been made recently, and this will lead to higher chances of either consolidation or profit-taking. Historically, assets that have performed better than their competitors have subsequently cooled as investors have reassessed the relative value of those assets in comparison to their overall market.
Prices of Silver and Gold
Silver on MCX is currently trading at Rs. 4,04,500 per kg. It has delivered 344% returns over the past year, 268% in the last six months, 71% year-to-date, 75% in the past month, and 21% over the last five days, reflecting strong and sustained momentum.
Gold on MCX is currently trading at Rs. 1,74,895 per 10 grams. Over the past year, it has delivered a 118% return, with a 29% gain year-to-date, 77% rise in the last 6 months, 29% increase in the past month, and 10% growth over the last 5 days.
Gold–Silver Ratio Signals Limited Near-Term Upside for Silver
The Gold-Silver ratio has decreased to approximately 50 at the beginning of 2026, down from pandemic highs of roughly 127 and well below the long-term historical average of approximately 70.
Therefore, this decrease indicates that Silver has already gone through most of its “catch-up” phase compared to Gold, and when the ratio trades at these low levels, silver will be viewed as expensive relative to Gold, which means it will be difficult for it to outperform gold in the near future unless there is either a large introduction of new catalysts or some new fundamental demand drivers introduced to be developed in the industry.
Investor Flows Indicate a Shift Toward Gold
ETF flow trends are pointing to a rotation in investor preferences. Global silver ETFs have seen outflows of more than 3 million ounces since early 2026, despite elevated prices. In contrast, gold ETFs continue to attract steady inflows. This divergence suggests that investors are increasingly favoring gold’s lower volatility and defensive characteristics over silver’s higher-beta profile, particularly in an uncertain macro environment.
Rising Geopolitical and Macro Risks are Strengthening “Safe Haven” Demand
Increased Geopolitical Tension from the US, Iran, Venezuela, and the Greater Middle East combined with uncertainty regarding the timing for the implementation of tariffs and potential US government shutdowns could lead to increasing demand for traditional “safe haven” assets.
History has shown that under these circumstances, gold has tended to benefit relative to silver as it is less reliant upon industrial and global growth when determining its demand, thus providing a greater degree of “safe haven” protection during heightened periods of uncertainty.
Silver’s price volatility has become more pronounced than gold due to a significant increase in both daily price swings and elevated prices in the physical marketplace as a result of increased demand for industrial products as well as demand as a precious metal (as evidenced by $10-$11 premiums in Shanghai over COMEX and more than 10% over MCX prices).
By contrast, gold has exhibited continued stability in its upward trajectory (as evidenced by the absence of significant volatility in its price and the relative stability of the premiums over the COMEX price and MCX price premium trends), making it more suitable for use in risk-managed and defensive investment strategies over the near term.
Higher Silver Prices Raise Rebalancing and Profit-Taking Risks
The growth of silver prices from Rs. 60,000 to almost Rs. 4,04,500 in MCX has resulted in dramatic increases in portfolio value for many large and institutional investors. As a result, there is a greater incentive for investing in silver now than before, creating the opportunity for profit booking and portfolio rebalancing.
It is important to note that the risk of rebalancing can limit the short-term upside for silver and create additional volatility. As such, although the long-term fundamentals for silver continue to support its continuing rise, gold is currently viewed as the more stable and better-positioned for preserving wealth.
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