This expert believes silver may be ready for a catch-up rally, recommends tactical allocation via ETFs

Silver may be gearing up for a potential rally, supported by its historical relationship with gold, persistent supply deficits, and rising industrial demand, according to Arihant Bardia, Director and Founder of Valtrust.

While silver has underperformed compared to gold in recent years, Bardia notes that in previous precious metal bull cycles, silver has historically outpaced gold in terms of returns.

“Between 2000 and 2025, the Gold-Silver ratio has ranged from 32:1 to 125:1, with a 25-year average around 68:1,” he explains. “Currently, the ratio is close to 100:1, suggesting silver could have room to catch up.”
Supply trends and demand drivers

One of the key factors underpinning this view is the ongoing supply-demand imbalance.

According to Bardia, 2025 marks the fifth consecutive year of silver being in a supply deficit, based on data from the Silver Institute (as of April 2024).

At the same time, industrial demand continues to rise, particularly from sectors such as solar energy, electric vehicles, and electronics.

“These drivers, when combined with the wide gap in the gold-silver ratio, point toward a scenario where silver could see a short-term re-rating,” Bardia adds.

Price outlook and valuation

While gold has recently reached levels around $3,500 per ounce, silver remains under $35. Based on fair value estimates, Bardia suggests silver could move toward a range of $53–$75 in the near term, if supportive conditions persist.

In rupee terms, he highlights the potential for silver to rise from around ₹97 per gram to ₹165 per gram, assuming a mean reversion in the gold-silver ratio.

This translates to a possible upside of around 70%, though he also cautions that such projections are contingent on broader market stability.

Tactical approach recommended

Despite the positive outlook, Bardia emphasises that silver should be treated as a tactical allocation, rather than a core portfolio holding.

“Tactical calls come with higher risk and require well-timed entry and exit,” he says.

He advises investors to define their exit strategy in advance—either by targeting returns in the range of 30–50% or applying a stop-loss of 10–15% to manage downside risk.

“The objective should be to capture the sharp move, not to stay invested for the long term,” he adds. “Tactical bets require discipline, and the entry-exit windows are usually tight.”

Given silver’s volatility, Bardia suggests limiting exposure to no more than 5% of the overall portfolio. He also recommends using Silver ETFs as the most suitable instrument for taking exposure.

“ETFs provide flexibility and ease of execution,” he says. “They can be traded on stock exchanges during market hours and allow even small-ticket investments, making them accessible for retail investors.”