Gold Outshines Silver as Tata MF Prefers 70:30 Allocation

Tata Mutual Fund's strategic framework recommends a 70-30 allocation to gold and silver for investors, with investments staggered rather than made in one go. The fund house prefers gold due to its defensive characteristics and relatively lower volatility, while silver offers additional growth potential but also higher volatility.

The gold-silver ratio has risen from around 51 in May to 70, indicating that gold is outperforming silver. Central banks are still buying gold, with official-sector purchases rebounding to 289 tonnes in the second quarter, according to World Gold Council data. This growth in central bank demand supports gold's medium- to long-term outlook.

Silver's investment story is more exciting, but also more volatile due to its industrial exposure. The Tata Mutual Fund report points to growing applications in electronics, AI-related hardware, renewable-energy infrastructure, and solar technology as long-term demand drivers for silver. However, if global growth slows or industrial demand weakens, silver can come under greater pressure than gold.