Gold is expected to outperform silver over the next six months due to persistent concerns over US interest rates and global economic uncertainty, according to Harshal Barot of Metals Focus. Barot noted that gold benefits from stronger institutional buying support, including central bank purchases, which silver lacks. While silver could catch up if market conditions stabilize, its weaker backing makes it more vulnerable during uncertain times.
The recent correction in gold prices may boost jewellery demand in India ahead of the festive season. However, gold imports are projected to decline by at least 20% from last year's levels, with silver imports potentially falling even more sharply. Full-year silver imports are estimated at around 4,000 tonnes, down from approximately 7,200 tonnes last year.
Jewellery demand in India remains uneven, with lighter, more affordable pieces gaining popularity. While sales volumes are rising, the total weight of gold sold may not increase significantly. Wedding jewellery continues to favor 22-carat gold, though lighter designs are becoming more common. Meanwhile, 18-carat jewellery is gaining acceptance due to improved designs and availability.
Silver's near-term outlook is more uncertain, with potential price declines to ₹1.75 lakh per kg or even ₹1.5 lakh per kg in a worst-case scenario. These levels could attract fresh buying from Indian consumers. However, investor demand for silver remains subdued due to large purchases made during last year's buying spree.