In May 2025, I did an in-depth coverage of Silver, highlighting the potential it held against gold. Not just the ‘gold-to-silver ratio’, which at that time was over 100, I also referred to a study by DSP mutual fund that showed whenever there is a rally in precious metals, then Silver tends to outperform significantly compared to Gold.
Today, we happen to witness that scenario where silver is trying to break free from gold. As of January 2025, the gold-to-silver ratio has fallen to 49.
Gold and silver are experiencing significant gains at the beginning of the week, starting January 19. On MCX, gold futures ( 5 February contracts) are at record highs, trading at Rs 1,44,834 per 10 gram, up 1.63% over the previous close.
Gold and Silver Prices
MCX Silver prices also rose above Rs 3 lakh per kg for the first time, with 05 MAR contracts at Rs 3,03,358 per kg, increasing by 5.42% over the previous close. In the spot market, gold trades at Rs 1,45,500 per 10 gram, silver at Rs 3,01,900 per kg.
In the international markets, silver is up 3.62% and trades at $93.15. Silver is less than $7 away from reaching the milestone mark of $100 per ounce. In 2025, Silver gained 150%, while in YTD 2026, Silver is up 24%, in less than 20 days of trading. In the international markets, gold trades around $4,668 per ounce, up by 8% YTD.
Why are metals in focus
The recent increase in demand for gold and silver is driven by President Donald Trump’s announcement of potential new tariffs on eight European countries, which has raised investor interest in safe-haven assets amidst geopolitical tensions.
Last week, metals were under pressure after the Trump administration decided not to impose tariffs on critical minerals, including silver. The market panic diminished as the tariff threat decreased.
Silver’s inclusion in the US critical minerals list has contributed to the recent price increase. Structural supply deficits have rendered silver a crucial asset, leading to market squeezes in London over the past year.
The interference of Trump and his administration in the functioning of an independent central bank, such as the US Federal Reserve, is viewed poorly by international investors, which might further harm the Fed’s standing and impact the prices of gold and silver.
More rate cuts from the US Fed are expected in 2026, which will likely boost metal prices. The only headwind is the strengthening of the US dollar index. The last time I checked, the USD index, which measures the currency’s strength against a basket of six other currencies, was trading close to 100. On January 19, the USD index is trading at $99.15, down 0.24% but up 0.89% in one month.