'Silver Is Poor Man's Gold': Nilesh Shah Lists Saudi Bank Purchases Among Key Factors Driving The Surge

Silver is the "poor man's gold", said Nilesh Shah, drawing parallels between the devil's metal and the yellow metal while speaking at NDTV Profit IGNITE's Diwali Edition.

The managing director of Kotak Mahindra AMC noted that industrial demand, especially from the solar energy sector, is pushing silver prices higher, while reports of Saudi Arabian banks purchasing Silver ETFs have added to the momentum.

"People are outrunning central banks," Shah said, pointing out how central banks bought gold and investor sentiment rallied in turn. "These are commodities — they go up and down," he added, emphasising the cyclical nature of precious metals.

Earlier in the day, Kotak Mutual Fund had temporarily suspended lumpsum and switch-in investments in Kotak Silver ETF Fund of Fund on Friday, citing the high spot premium for silver over the import parity price. The open-ended Fund of Fund scheme invests in units of Kotak Silver ETF, listed on the stock market.

"Domestic silver is currently trading at a significant premium compared to international prices due to acute scarcity in India's physical silver market... We anticipate that the shortage in domestic silver supply may persist through the end of October 2025," according to a statement.

A switch-in investment is the process of transferring money from one mutual fund scheme to another as part of portfolio reallocation.

This development comes on the back of spot silver crossing the $50-mark for the first time on Thursday, amid a surge in demand for safe-heaven assets, triggered by the US government shutdown and tariff uncertainties.

The precious metal rose as much as 4% to $51.24 an ounce. This is the highest since the commodity boom in 2011—which was stoked by the European debt crisis—and also surpasses the highs seen in 1980, when silver had shot up due to a notorious squeeze that was orchestrated by the billionaire Hunt brothers.

As of 9:45 p.m. IST, spot silver trades at $49.9875, barely paring its $50 levels.