Gold prices are likely to hold up better than silver over the next six months as global economic uncertainty and concerns over US interest rates continue to weigh on precious metals, according to Harshal Barot of Metals Focus.
Barot expects gold to outperform silver over the next six months, although silver could catch up if global conditions stabilise and precious metal prices recover.
“Gold is a much larger liquid market, has a lot of institutional buying support, including that of central banks, which is sort of absent when it comes to silver,” Barot said.
While a meaningful recovery in prices may take time, the recent correction could support jewellery demand in India ahead of the festive season.
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Barot expects gold imports to decline by at least 20% from last year’s levels. Silver imports could fall even more sharply, with full-year imports estimated at around 4,000 tonnes, compared with approximately 7,200 tonnes last year.
Jewellery demand in India remains uneven, with affordable, lightweight pieces performing better than heavier ornaments. With gold prices still elevated compared with levels seen over the past two years, jewellers have increasingly focused on lightweight designs that fit consumers’ budgets.
Pieces weighing as little as one or two grams have gained traction, particularly in the daily-wear segment. These products are attracting buyers looking for jewellery at relatively accessible price points, including items priced between ₹10,000 and ₹1.5 lakh.
However, stronger sales in terms of the number of pieces do not necessarily translate into higher demand by weight. As jewellery becomes lighter, the total quantity of gold sold can remain under pressure even when retailers report healthy customer interest.
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Wedding jewellery continues to be dominated by 22-carat gold, although buyers are also opting for lighter designs. Meanwhile, 18-carat jewellery is gaining acceptance, supported by improving designs and wider availability.
Silver faces a more uncertain near-term outlook, with further price declines in international markets still possible. Barot identified ₹1.75 lakh per kg as an important level for Indian prices, while a deeper correction towards ₹1.5 lakh per kg could also be possible in a worst-case scenario.
These levels could attract fresh buying from Indian consumers, as they are closer to price points that buyers had previously viewed as affordable.
Despite the recent correction, investor demand for silver has remained subdued. Barot attributed this partly to the substantial quantities accumulated by investors during last year’s buying spree, which may limit the appetite for additional purchases in the near term.
Silver could outperform gold eventually if market conditions improve. However, its relatively weaker institutional buying support makes it more vulnerable during periods of uncertainty.
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Gold likely to beat silver over next six months as US rate concerns persist: Metals Focus
