Gold and silver have given stupendous returns this year. Domestic spot gold prices have surged by almost 70% this year so far, while spot silver has seen even stronger gains, surging by 115% in the same period.
On the MCX, silver March futures hit a record high of ₹1,93,452 per kg, surging by 2.5%, on Thursday, December 11. MCX gold February futures rose by more than half a per cent to ₹1,30,719 per 10 grams.
The main drivers of gold and silver prices this year have been geopolitical risks, global macroeconomic uncertainties due to US tariffs, expectations of US Fed rate cuts, buying by central banks, and robust inflows in gold and silver exchange-traded funds (ETFs)
Currently, the gold-silver ratio in India stands at 68. The gold-silver ratio measures how many units of silver are needed to buy one unit of gold. So, to buy one gram of gold, one needs 68 grams of silver at present.
The gold-silver ratio is a way to understand how expensive or cheap silver is in comparison to gold and can signal the potential price trends of both metals.
Usually, a high ratio means gold is outperforming, indicating high safe-haven demand. On the other hand, a low gold-silver ratio suggests silver is enjoying increased demand and may rise further.
Gold-silver ratio: What does it indicate about precious metal prices?
The current gold-price ratio indicates that silver is still cheaper relative to gold, and it may try to catch up with the yellow metal.
“Historically, the ratio hovers around 90. Today, you need only about 68 grams of silver to buy a gram of gold, which shows that silver is still cheaper relative to gold,” Jigar Trivedi, Senior Research Analyst at Reliance Securities, noted.
“The current ratio favours going long in silver. Possibly we can see a sharp rally in the metal,” said Trivedi.
At the current juncture, silver is experiencing a stellar rally driven by strong industrial demand, rising investment demand, a weaker dollar, expectations of rate cuts, and tight supply conditions.
Gold and silver prices outlook: Corrections, volatility ahead?
Experts believe silver prices could correct by 20-30% or even more due to the steep rise, but the overall trend remains positive.
“Silver is undeniably in demand, and this surge is unprecedented. Prices could correct by even 50% next year, but as of today, there is no catalyst for such a fall. At current levels, it is better to wait for a 7-10% correction before entering silver-either through ETFs or futures-for investment purposes,” Trivedi said.
Many factors supporting silver prices also support gold rates, but the key difference is industrial demand. Expansions in sectors such as solar energy, electric vehicles, and semiconductors have also boosted demand for silver.
Investment inflows also show a divergence, as Trivedi highlighted that holdings in the iShares Silver Trust, the biggest silver ETF globally by assets under management (AUM), are increasing rapidly, whereas holdings in the SPDR Gold ETF, the biggest gold ETF globally, have stabilised without further additions.
Aksha Kamboj, Vice President at the India Bullion and Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures, pointed out that a falling ratio reflects silver’s increasing relative value due to strong industrial demand, tight supply conditions, and expectations of continued rate cuts by the Fed.
“Given this powerful technical breakout, coupled with structural demand factors, further sharp rallies in silver remain possible, although overall volatility is likely to rise with shifting market sentiment and real yields. However, after the Fed rate announcement of only a single rate cut in 2026, gold prices are likely to pause unless quantitative easing is done,” said Kamboj.
According to Axis Mutual Fund, while gold retains long-term support from persistent central banks’ buying and safe-haven demand, 2026 may bring bouts of correction and volatility.
The fund house’s outlook for silver is constructive with multiple tailwinds sustaining its rally even as valuations stretch. However, 2026 may bring corrections and volatility as investors reassess valuations, said Axis Mutual Fund.
Nikunj Saraf, CEO of Choice Wealth, believes the underlying story still looks strong.
“Silver’s supply deficit isn’t easing anytime soon, and industrial demand continues to rise. Gold remains well-supported by structural buying and a higher-for-longer geopolitical environment,” said Saraf.
However, Saraf emphasised investors must temper expectations after such a strong run.
“Staying invested with a long-term view, keeping allocations disciplined, and booking partial profits if gains feel stretched is the most balanced approach,” said Saraf.