Silver has surged over 200% in the past year, outpacing gold’s 80% rise, leading to a favorable condition for gold in the short run, according to a report by Motilal Oswal Financial Services Ltd. The report highlights that the current gold-silver ratio now favors gold following silver’s significant performance.
The gold-silver ratio has decreased from pandemic highs of 127 to around 50 at the beginning of 2026 due to silver’s remarkable outperformance. This adjustment indicates a potential shift in the risk-reward balance towards gold in the immediate future, despite a positive long-term outlook for both precious metals.
While silver is expected to continue its upward trajectory supported by industrial demand and tight market conditions, the recent surge has heightened short-term volatility. Motilal Oswal Financial Services Ltd.’s Head of Research Commodities, Navneet Damani, and Commodities Analyst, Manav Modi, suggest that a higher allocation to gold can help manage fluctuations during silver’s strong performance phase.
Silver’s sharp price fluctuations have made it more volatile compared to gold, which offers relatively more stability, making it a preferred short-term hedge in uncertain market environments. The report also notes that the significant 200% surge in silver prices could lead to a consolidation phase at elevated levels or a rebalancing by market participants.
The brokerage firm emphasizes that the strategy is not a negative stance on silver but a risk-managed reallocation approach following its rapid increase. In 2026, global silver ETFs witnessed outflows exceeding 3 million ounces, while gold ETFs saw more stable inflows, reflecting varying investor sentiments towards the two precious metals.
The report points out that global liquidity is on the rise, with an increase in money supply in the US and China, particularly with China’s money supply growing by over 8% year-on-year. Such conditions historically drive demand for safe-haven assets like gold, further supporting the case for a favorable outlook for the yellow metal in the current market scenario.
