Gold Takes Center Stage as Silver Lags Behind in Near-Term Performance

Harshal Barot, Senior Consultant-South Asia & Middle East at Metals Focus, expects gold to remain stronger than silver in the near term. From a short-term perspective, he thinks it's possible that silver may underperform over the next couple of quarters. The current macro and geopolitical backdrop is more supportive of gold, while silver could see a stronger run later.

Barot pointed out that Indian silver demand remains weak due to strong imports earlier this year, which have left fabricators and bullion dealers with sufficient stocks. He stated that there has been no major pickup in physical or investment demand for silver.

On the other hand, gold continues to see strong momentum, with prices holding above $4,650 an ounce. Barot sees $5,000 an ounce as the next hurdle and believes higher import duties and rupee depreciation could push Indian gold prices to fresh highs.

In the longer term, however, Barot expects silver to gain momentum once gold moves closer to its highs and potentially outperform gold over a two- to three-year period. This is because the current factors supporting precious metals are more favourable for gold in the short term, but could shift in favour of silver as gold approaches its all-time highs.