Silver’s got the shine to beat other asset classes, better buy on dips
Analysts recommend investing in silver as it is expected to outperform other asset classes in the next year. With strong industrial demand and potential interest rate cuts, buying on dips could yield significant returns. Consider a tactical allocation for potential gains.
looking beyond red-hot equities could consider buying , which could outperform various over the next 12 to 15 months.Wealth advisors, however, recommend the metal only on dips or making staggered purchases after the recent price run-up.
"Given its strong industrial usage and expected in , investors could make a 5-10% tactical allocation to silver," said Viral Bhatt, founder of Money Mantra. "They could buy on dips and stagger their purchases over the next 3-6 months."
ETMarkets.comPrices of silver are seen firming up over the next year or so on account of the growing demand as an , expected recovery in China, and a likely by the US Federal Reserve.
So far in 2024, silver, which trades at ₹91,700 per kg, has returned 24%.
Investors must buy the white metal on dips with a target of ₹1 lakh to ₹1.25 lakh over a 12-25 month perspective, said Manav Modi, bullion analyst at . "After the sharp rise, we are likely to see some profit booking at certain intervals. However, any major dips could be used as a buying opportunity," he said.
The next big trigger could be interest rate cuts by the US Federal Reserve. Silver prices tend to strengthen when interest rates fall as the metal becomes more attractive than interest-bearing assets.
Analysts said higher industrial usage led by a growing focus on renewables has created a as supplies are likely to be limited due to mine production capacities, thereby driving prices higher. "The demand-supply gap has been in deficit this year for silver, marking it the fourth consecutive year. Silver's usage in is propelling its industrial demand, especially from the solar and EV sectors," said Vikram Dhawan, head of commodities at Nippon India Mutual Fund.
Higher industrial demand for silver comes from its use in solar panels, EVs and even 5G technology. China alone accounts for 90% of global panel shipments.
