Hyderabad: Gold gained a near-term advantage over silver after a sharp rally in the white metal over the past year altered the gold silver ratio, according to Motilal Oswal Financial Services Ltd.
The brokerage said silver prices surged by more than 200 per cent in the last 12 months. In comparison, gold prices rose by about 80 per cent during the same period. As a result, the relative valuation between the two precious metals shifted.
Motilal Oswal noted that the gold silver ratio declined sharply following silver’s steep rise. The ratio fell from pandemic-era highs of 127 to nearly 50 at the beginning of 2026, signalling a major reset.
Although the firm remained positive on the long-term outlook for both metals, it flagged higher near-term risks for silver due to its rapid ascent.
“We remain positive on both metals, but silver’s recent rally has raised near-term swings,” said Navneet Damani, Head of Research Commodities, and Manav Modi, Commodities Analyst at Motilal Oswal Financial Services.
Damani said investors could manage volatility by increasing gold allocation during such phases. He added that gold typically offers greater stability during uncertain market conditions.
Gold silver ratio reset shifts short-term preference
The report highlighted that silver tends to show sharper price movements, while gold remains relatively stable. It noted that silver’s jump from ₹60,000 to ₹3,20,000 per kg could trigger a pause or profit booking in the near term.
However, Motilal Oswal clarified that the assessment did not reflect a negative stance on silver. Instead, it suggested a tactical shift after an unusually steep rise.
The brokerage also pointed to fund flow trends. Global silver exchange-traded funds recorded outflows of over 3 million ounces in 2026. In contrast, gold ETFs continued to see steadier inflows.
Motilal Oswal said global liquidity conditions remained supportive for gold prices. It cited rising money supply levels in major economies, including the United States and China. China’s money supply expanded by over 8 per cent year-on-year, a trend that historically supports gold demand.
