Gold price outperforms Silver and Sensex in H1CY25; Silver may take the lead in H2

Gold Leads the Rally in H1CY25

In the first half of calendar year 2025 (H1CY25), gold emerged as the top-performing asset class among key Indian investment avenues, outpacing both silver and the benchmark Sensex. With a stellar year-to-date (YTD) gain of over 14%, the yellow metal benefitted from global uncertainties, central bank buying, and strong retail demand.

In contrast, silver posted modest gains of around 8% during the same period, while the Sensex ended H1 with a 5.6% increase, primarily driven by selective blue-chip performances amid mixed macroeconomic indicators.

Gold’s Rise Backed by Global Uncertainty

The surge in gold prices can be attributed to multiple macroeconomic and geopolitical triggers. Escalating tensions in Eastern Europe and the Middle East, a persistently high-interest rate environment in the US, and fears of a global economic slowdown prompted investors to seek safety in bullion.

“Gold’s safe-haven appeal continues to dominate investment flows, especially when global equity markets witness volatility,” said Ajay Kedia, Director at Kedia Commodities. “Additionally, central banks, including the Reserve Bank of India (RBI), have continued their gold accumulation strategy, adding to the demand strength.”

Gold prices in India hit an all-time high of ₹72,600 per 10 grams in April before slightly retracing, ending June around ₹70,400 levels. In dollar terms, spot gold traded around $2,320 per ounce, supported by a weakening dollar index and subdued US economic data.

Silver Trails in H1—But Hopes Build for a Catch-Up Rally

Despite its underperformance relative to gold, silver’s outlook for H2CY25 is increasingly bullish. Analysts believe silver is poised to benefit from a combination of industrial demand resurgence and speculative interest.

“Silver is often called ‘gold on steroids’ because it tends to move more sharply once momentum builds,” said Sugandha Sachdeva, Founder of SS WealthStreet. “With industrial demand—especially from electronics and solar energy—likely to rise in H2, silver could stage a meaningful catch-up.”

Silver prices remained volatile through H1, trading between ₹81,000 to ₹93,500 per kg in India. The commodity is currently hovering around ₹89,000. Internationally, silver is trading near $29.3 per ounce, having faced resistance above $30 in recent months.

Sensex Sees Subdued Gains Amid Mixed Sentiment

India’s benchmark equity index, the BSE Sensex, managed a modest 5.6% gain in H1CY25, amid a backdrop of foreign portfolio outflows, fluctuating crude oil prices, and election-led uncertainty. However, sectors such as capital goods, banking, and infrastructure offered pockets of outperformance.

“Investors remained cautious in the run-up to the general elections, and that capped index-level returns,” said Vivek Rathi, Research Head at Knight Frank India. “The post-election clarity has brought some buying back into large-cap stocks, but broader participation remains selective.”

Domestic equity valuations also turned relatively stretched, prompting investors to rotate into safer or alternative assets like gold.

Gold-Silver Ratio Indicates Room for Silver Reversal

One of the most tracked indicators in the precious metals space—the gold-to-silver ratio—has hovered around 78:1 for much of H1. Historically, a ratio above 70 often signals a potential silver rally, as the metal plays catch-up to gold.

“The ratio suggests silver is undervalued relative to gold,” noted Anuj Gupta, Head of Commodity & Currency at HDFC Securities. “A reversal in the ratio could mean a sharp upward move in silver prices in the coming quarters.”

Outlook for H2CY25: Will Silver Take the Lead?

Going into the second half of 2025, silver is expected to find tailwinds from the accelerating green energy push, especially solar power, where silver plays a vital role in photovoltaic cells. Additionally, any signs of global monetary easing could add speculative momentum.

Gold, meanwhile, may consolidate near current highs unless fresh geopolitical or inflationary risks emerge. Analysts suggest that most of gold’s gains for the year may already be priced in.

“While gold could hold its ground, silver has the potential to outperform due to its dual character—part precious, part industrial,” said Bhavik Patel, Senior Commodity Analyst at Tradebulls Securities. “Any global stimulus or supply constraints can fuel a sharp rally in silver.”

Investor Strategy: Diversify Within Bullion

With both metals having distinct fundamentals, experts advise investors to maintain a diversified approach.

“A balanced exposure to gold and silver can help hedge against volatility while capturing potential upside,” said Neha Gupta, Senior Analyst at Edelweiss Wealth. “We recommend a 60:40 allocation in favor of gold for conservative investors, and the reverse for aggressive ones.”

Physical buyers, especially during the upcoming festive season, may find dips in silver attractive, while digital gold and ETFs continue gaining traction among younger investors.

In summary, H1CY25 belonged to gold, as it comfortably outshined silver and Indian equities amid global headwinds. However, with improving industrial activity and historical mean-reversion patterns, silver might just be setting the stage to steal the spotlight in the second half.

For Indian investors looking ahead, a well-considered mix of both precious metals may offer the right blend of safety, returns, and diversification in an increasingly uncertain global environment.