All That Glitters Isn't Gold: Silver Outperforms Yellow Metal With 40% Returns YTD—Should You Buy?

Gold Vs Silver: Gold prices hit a fresh record high this week, extending an eight-day rally that saw the yellow metal cross the notable Rs 1,07,000-mark. Despite the staggering rally to hit fresh record highs, the yellow metal still has lower year-to-date returns compared to silver.

While gold's rally has dominated headlines, silver has proven to be the true star of the year. While gold has delivered a year-to-date return of 35.43%, Bloomberg data shows that silver has outperformed it significantly with a higher return of 41.01%.

This superior performance is broadly attributed to silver’s dual role, according to Kedia Advisory. Unlike gold, which is primarily seen as a store of value, silver benefits from both investment demand and its widespread use in industries like electronics, solar panels, and medicine.

This industrial demand has given silver an extra edge in a year of global economic recovery and renewed manufacturing activity, making it the brighter performer of the two precious metals.

Gold prices made headlines trading at new all-time highs and this surge is largely attributed to a blend of global and domestic factors. On the international front, escalating trade tensions have fueled a global rush towards safe-haven assets.

When political and economic uncertainty rises, investors traditionally flock to gold, a move that provides a buffer against market volatility. Domestically, the continued weakening of the Indian Rupee against the US dollar has further amplified this demand. A weaker rupee makes imported gold more expensive, which in turn pushes domestic prices higher.

According to a Kedia Advisory Report on Bullion, the bullish sentiment for gold has been significantly boosted by the rising expectations of a September rate cut by the US Federal Reserve. With traders pricing in an 86% chance of a 25 basis points cut, the outlook for the yellow metal remains positive. The report also notes that gold has key resistance at Rs 1,06,400 to Rs 1,08,000, while a strong support level is established at Rs 1,02,000.