Gold-Silver ratio: The gold-silver ratio has witnessed sharp volatility so far this year, tracking fluctuations in the prices of precious metals. On Tiesday, the ratio rose to 62, recovering after dipping in May.
According to Tata Mutual Fund’s June 2026 note on gold and silver, the gold-silver ratio, which had dipped in May 2026, has once again recovered above the 62 level. The fund house expects the ratio to move towards 68, indicating that gold could outperform silver in the near term amid heightened geopolitical uncertainty.
The ratio measures how many ounces of silver are required to buy one ounce of gold. A rising ratio generally indicates gold is outperforming silver, while a falling ratio suggests silver is gaining ground relative to gold. Historically, investors have used the ratio to assess relative valuations and identify opportunities between the two precious metals.
“Gold-Silver ratio though witnessed a dip in May-26, have recovered above 62 level suggesting outperformance of gold over silver. The expectation is that the ratio to rise back towards 68 level, mostly due to rise in gold demand amid geopolitical tension,” Tata Mutual Fund said in its June 2026 outlook.
Gold rate rose in morning deals on MCX on Tuesday, 16 June, following a muted trend in global bullion prices, as investors await key details of the US-Iran peace deal and how the ongoing dispute ends in the coming days.
MCX gold rate today for August futures contracts was trading 0.09% higher at ₹1,53,060 per 10 grams. MCX silver futures, on the other hand, were trading 0.4% lower at ₹2,51,130 per kg at around 9:35 am.
What is the Gold-Silver Ratio?
The gold-silver ratio is a widely tracked indicator that shows how many ounces of silver are needed to buy one ounce of gold. Investors use the ratio to assess the relative value of the two precious metals and identify potential investment opportunities.
A rising gold-silver ratio typically signals that gold is outperforming silver, whereas a declining ratio indicates silver is gaining strength relative to gold. Historically, elevated ratio levels have often been viewed as a sign that silver is undervalued compared to gold, while lower ratios suggest silver is outperforming and trading at a relative premium.
Factors impacting Gold and Silver
Despite near-term volatility, Tata Mutual Fund remains bullish on precious metals over the long term and recommends a staggered investment approach rather than aggressive lump-sum buying.
Gold is primarily viewed as a monetary asset and a safe-haven investment. It tends to benefit during periods of geopolitical uncertainty, rising sovereign debt levels and central bank reserve diversification. Silver, meanwhile, plays a dual role. Apart from its monetary characteristics, it is also a key industrial metal used in solar panels, electric vehicles, semiconductors and 5G infrastructure.
The fund house pointed to continued central bank buying as one of the strongest structural supports for gold. According to the report, central bank purchases of gold have nearly doubled over the last decade as countries seek to diversify reserves away from fiat currencies.
Following the Russia-Ukraine conflict and the freezing of nearly $300 billion of Russia’s foreign exchange reserves, central banks have become increasingly conscious of reserve security. Gold held domestically cannot be frozen or controlled by foreign financial institutions.
India has been a notable participant in this trend. The Reserve Bank of India purchased 72.6 tonnes of gold in 2024, making India the world’s second-largest central bank gold buyer that year. By 2025, India’s gold reserves had reached around 880 tonnes, while gold’s share in India’s foreign exchange reserves rose from 8.4% in July 2024 to 16.2% by January 2026.
At the same time, silver’s industrial demand story has faced some near-term headwinds. Manufacturing uncertainty and easing geopolitical tensions have temporarily affected industrial consumption trends, even as its long-term demand outlook remains constructive.
“Silver is a two-headed metal. One head is monetary (served as sound money for millennia, stores purchasing power, and moves with gold in response to real yield and dollar dynamics). Another one is industrial application (solar panels, electric vehicles, 5G infrastructure, and semiconductors),” the report noted.
Silver continues to benefit from a supply-demand imbalance. The report notes that 2026 is on track to become the sixth consecutive year of silver deficits, with demand exceeding available supply.
Industrial demand remains the primary consumption driver, while China’s silver demand reached an eight-year high in the first quarter of CY26 even as domestic stockpiles declined sharply.
Gold or silver: Which metal looks better positioned now?
The outlook suggests a nuanced answer. In the short term, gold appears better positioned due to safe-haven demand, ongoing geopolitical tensions, central bank buying. Domestic investors may also benefit from rupee depreciation, which could cushion downside risks in local gold prices.
“Gold price may consolidate in the near term, amid mixed macro signals while some pressure may build up over rate hike expectations, a stronger dollar, and elevated bond yields. Short-term volatility of around ±5% is likely on Geopolitical developments, particularly around the US–Iran conflict. For Indian investors, rupee depreciation should cushion the downside, keeping domestic gold prices in a tighter range versus international markets. The medium-to-long-term outlook is still bullish over supportive structural and cyclical fundamental factors. Investors may look for accumulation on any decline in the prices,” said the brokerage.
For silver, the mutual fund noted that it may continue to get dual advantage of precious and industrial metal.
“Silver for short term may witness some consolidation after recent decline. The deteriorated global economic outlook may limit the demand for silver over medium term. The decline in solar installations and large liquidation of the long positions has eased the supply tightness in global market. Silver is a developing growth story, and the long-term trend is highly dependent on broad recovery in industrial demand,” it said.
As per the mutual fund, investors can look for staggered approach to invest in the medium term to long term investment considering the volatile nature of the commodity.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
