Kotak Mutual Fund believes silver is emerging as a strategic asset for modern times—offering not just a hedge during crises but also a long-term play on industrial growth.

“Silver has historically helped preserve wealth during turbulent periods,” Kotak MF noted in a recent investor note, citing data from past crises.

During the Russia-Ukraine war (Feb-Mar 2022), while the Nifty 50 fell 10%, silver prices rose 12%. Even during the 2024-25 market correction, silver gained 3% as the index slipped 15%.

Beyond its safe-haven appeal, silver’s industrial side is shining. Industrial usage now accounts for 50% of silver demand, driven by sectors like 5G, solar PV cells, electric vehicles, and infrastructure.
“In 2024, industrial demand hit a record 680.5 million ounces,” the fund house highlighted, adding that growing consumption by the automotive and aerospace industries—especially for brazing alloys and solders—is boosting demand.

At the same time, silver faces a structural supply deficit, now in its fourth consecutive year.

Kotak MF pointed out that 2025 is expected to see a 21% supply shortfall, a factor that could support higher prices.

Another factor in silver’s favor is the elevated gold-silver ratio, currently at 102:1. The historical average is around 60:1. “This makes silver relatively cheap compared to gold and increases its appeal as an investment,” Kotak said.

Typically, a higher ratio presents a potential buying opportunity in silver.

With rising industrial use, affordable entry price, and protection during market turmoil, “silver could be a smart addition to investor portfolios,” Kotak MF said.