“From a short-term perspective, I think next couple of quarters perspective, it is very possible that silver may underperform,” Barot said.
He said the current macro and geopolitical backdrop is more supportive of gold, while silver could see a stronger run later. “Once probably gold achieves or nears the all-time highs, that’s when I think we expect silver prices to start picking up and then maybe eventually outperform gold over a two- or three-year horizon.”
Indian silver demand, however, remains weak. Barot said there has been no major pickup in physical or investment demand, partly because strong imports earlier in the year have left fabricators and bullion dealers with sufficient stocks.
“Even though we have import restrictions around silver, but nobody in that trade is actually sort of feeling a shortage,” Barot said.
Gold, meanwhile, continues to see strong momentum, with prices holding above $4,650 an ounce. Barot sees $5,000 an ounce as the next hurdle, while higher import duties and rupee depreciation could push Indian gold prices to fresh highs.
Indian gold demand is also expected to recover as the festive and wedding season approaches. Barot said the recent India International Jewellery Show (IIJS) received a strong response, although some orders could be delayed or cancelled if prices rise too quickly.
The rise in gold prices is also changing consumer buying patterns. Bridal jewellery remains relatively resilient, with buyers continuing to prefer 22-carat gold, although the weight of jewellery is coming down.
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The bigger structural shift is in daily-wear jewellery, where consumers are moving towards lighter weights, 18-carat and 14-carat gold and diamond jewellery as they look to manage higher prices.
Overall, Barot expects gold to remain the stronger precious-metal play in the near term, while silver could offer greater upside once gold gets closer to its peak levels.
