Gold–silver ratio: The sharp 200% surge in silver prices over the past 12 months has not only outpaced gold’s 80% return but has also compressed the gold–silver ratio. This has led domestic brokerage Motilal Oswal Financial Services (MOSFL) to suggest that gold is better positioned for the next leg of the upmove in the precious metals space.
Stressing its positive stance on precious metals, MOSL analyst Navneet Damani stressed that the gold-silver divergence signals the need for rebalancing of weightage in investor portfolios.
Gold and silver prices traded at record high levels in the domestic futures market today, January 23. MCX gold rates jumped 1.8% to top ₹159,000 per 10 grams. Meanwhile, MCX silver futures rallied almost 4% to ₹339,927 per kg.
Gold-silver ratio
The gold-silver ratio has compressed from pandemic highs ~127 to ~50 at the start of 2026, signalling that a large part of silver’s catch-up trade has already played out.
Traders use the gold-silver ratio to gauge market trends and decide when one metal offers better value than the other.
Historically, the gold–silver ratio has a long-term average near 70, with the current level of 50 placing it close to its lows. Such levels, said Damani, have historically been unsustainable, with the ratio reverting tohigher over time.
“A move back toward 65–70 would imply relative outperformance of gold, supporting a higher allocation to gold as a risk-managed positioning, not a negative view on silver,” he added.
High silver price volatility favours gold
Furthermore, silver volatility has expanded significantly, with wider daily ranges and faster swings. Gold, on the other hand, continues to show trend stability with controlled pullbacks.
Thus, Damani argues that increasing gold allocation would help smooth portfolio volatility while retaining exposure to metals.
After capturing a major move from ₹60,000 to ₹3,20,000, a phase of consolidation or rebalancing by market participants cannot be ruled out at elevated levels.
MOSL also pointed out that despite strong price action, global silver ETFs have seen outflows of over 3 million ounces since the start of 2026, while gold ETFs have witnessed comparatively steadier inflows, reflecting investor preference for more defensive positioning.
Therefore, against this backdrop, MOSL suggests a split between bullion, with 75% allocation to gold and 25% to silver, indicating a preference for gold as a relatively steadier hedge in the current environment.
“Going forward, we believe investors can benefit from a rebalanced precious metals strategy—retaining silver as a long-term structural theme, while increasing gold allocation to manage near-term volatility and capture a potentially stronger risk-adjusted opportunity in the next phase of the cycle,” Damani added.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions.
