Gold or silver, which is a safer bet? Investment expert weighs in amid rising prices

CHENNAI: As global uncertainties persist, ranging from inflation and geopolitical tensions to fluctuations in the US dollar, investors are increasingly turning to precious metals. With both metals experiencing rising prices, investment expert Dharmasri Rajeswaran of Sai Sharetute told Maalaimalar that gold remains a safer long-term option, while silver’s volatility makes it a riskier choice for long-term investment.

Rajeswaran said that while both gold and silver are better investment options than traditional savings, investors must understand market dynamics and strike a balance between risk and reward before investing.

Gold and Silver: Which is better?

“Amid global inflation, geopolitical tensions, and fluctuations in the US dollar, gold acts as a safe-haven asset,” says Rajeswaran. “Silver, however, is more volatile, as its price depends on both industrial demand, such as in solar panels and electric vehicle manufacturing, and investment demand.

“When the economy is strong, silver prices rise, but during a recession, they fall sharply. So, it’s better to invest more in gold and only a small portion in silver,” he adds.

Buying Gold and Silver through the Stock Market

Investors can also buy gold and silver through the stock market using a demat and trading account. “You can invest in gold and silver ETFs such as Nippon India ETF and ICICI Prudential Silver ETF,” Rajeswaran explains. “These have lower costs compared to jewellery or coins, involve no storage or security risks, and can be easily converted into cash,” he adds.

Special Diwali trading

On Diwali, the stock market opens for an hour in the evening for Muhurta Trading, a ritual to worship Goddess Lakshmi. It is believed that trading during this session brings prosperity and good fortune throughout the year. “You can buy a few shares of a trusted company or start a new SIP on this day,” suggests Rajeswaran.

Stock Market outlook

Rajeswaran describes the current stock market as one of “stable volatility.” “Despite global economic challenges, India’s domestic growth, reflected in the GDP rate, is supporting the market. There is little chance of a major decline, but investors should not expect very rapid growth either,” he notes.

He recommends investing in banking and financial services, infrastructure and capital goods, and domestic cyclical sectors, while avoiding IT services and export-oriented industries.

Silver is not an alternative to gold

“Silver cannot be considered an alternative to gold,” cautions Rajeswaran. “Although silver prices are currently rising, their stability is uncertain. It can be part of your portfolio, but not the main focus.”

He suggests real estate mutual funds (REITs) and corporate bond mutual funds as safer alternatives that offer lower risk and more stable returns compared to the stock market.