Imagine a dusty old marketplace, somewhere between the deserts of Persia and the ports of Venice. Trader’s shout, coins clink, and hidden beneath layers of silk and spice lies the true currency of trust: gold and silver. Centuries pass. Kingdoms rise, currencies fall, wars begin and end — yet these two metals remain relevant across changing economic eras. Fast forward to today: we no longer trade with caravans or galleons, but with algorithms and apps.
Still, when fear creeps into our modern world — when inflation bites, when markets tremble, when headlines scream uncertainty — we reach for the same old anchors. Gold for security. Silver for opportunity. They’re not just metals; they’re ancient promises we still believe in.
In this blog, we aim to understand the history and relationship between the two commodities, what has led to the recent rally in these two precious metals, and what the current outlook look may suggest.
The Historical Love Affair: Gold & Silver Through Time
Gold and silver have shared a long and fascinating journey with human civilisation. In ancient Egypt, gold wasn’t just wealth — it was considered divine, the metal of gods and kings. Rome, on the other hand, built its empire on silver, using it as the foundation for trade, taxation, and even soldier salaries — the very root of the word “salary.”
As history progressed, these metals evolved from mere symbols of power to pillars of global finance. The gold standard in the 19th century tied currencies to gold reserves, aiming to create stability and trust in money. After two world wars, the Bretton Woods Agreement once again placed gold at the centre of the international financial framework, linking the US dollar to gold and, through it, influencing much of the world’s exchange rate system.
What’s remarkable is how, despite changing empires, technologies, and financial systems, gold and silver have never lost their relevance. They remain widely regarded as stores of value, not because they yield income, but because they have historically. endure where paper promises often fail.
Gold and Silver in the Modern Era: How Have They Performed?
Source- LBMA.Data as on 30-June-25. The above graph is used to explain the concept and is for illustration purpose only and should not be used for development or implementation of an investment strategy. Performance results have many inherent limitations and no representation is being made that any investor will, or is likely to achieve. Past performance may or may not be sustained in the future and is not a guarantee of future return.
Over the past 25 years, gold and silver have moved through distinct phases, reflecting cycles of crisis, recovery, and macroeconomic shifts. Both metals delivered generated notable returns between 2000 and 2011, driven by inflation fears, a weak dollar, and the 2008 Global Financial Crisis. Silver briefly outperformed gold during this period, but its gains proved short-lived as volatility took over.
From 2012 to 2018, both metals entered a period of stagnation. Gold held its ground as a store of value, while silver lagged, weighed down by weak industrial demand and lower investment demand.
Since 2019, gold has reached new highs, supported by central bank buying, inflationary pressures, and geopolitical risks. Silver has recovered too, helped by its role in green technologies, but remains more volatile and cyclical.
The grey shaded periods highlight the 2008 Global Financial Crisis and the 2011 Eurozone Debt Crisis — moments when both metals were viewed as potential hedges. Gold has historically exhibited greater price stability, while silver has shown high cyclical price movements linked to industrial demand and market trends.
Source- Bloomberg.Data as on 30-June-25. The above graph is used to explain the concept and is for illustration purpose only and should not be used for development or implementation of an investment strategy. Performance results have many inherent limitations and no representation is being made that any investor will, or is likely to achieve. Past performance may or may not be sustained in the future and is not a guarantee of future return.
The Gold-Silver Ratio has averaged around 68.6 over the long term but currently stands at 91.5, which is above its historical norm. This elevated ratio suggests that silver remains undervalued relative to gold by historical standards.
Notably, the ratio spiked sharply during periods of market stress, such as 2020, reflecting gold’s traditional role as a safer haven. Post-2020, although the ratio has moderated, it continues to hover at elevated levels, suggesting silver’s recovery has lagged gold’s outperformance in recent years.
Historically, reversions from high ratios have often coincided with periods of strong silver outperformance relative to gold.
What Drives Them Today: Factors Shaping Prices in 2025
Source- World Gold Council. Data as on 30-June-25. The above graph is used to explain the concept and is for illustration purpose only and should not be used for development or implementation of an investment strategy. Performance results have many inherent limitations and no representation is being made that any investor will, or is likely to achieve. Past performance may or may not be sustained in the future and is not a guarantee of future return
In 2023, central banks added over 1,000 tonnes of gold to their reserves — one of the highest annual totals on record. This rise isn’t driven by speculation but reflects a deliberate strategy to protect against currency debasement, inflation, and rising global uncertainty. With confidence in traditional assets like U.S. Treasuries reportedly softening, gold is increasingly becoming the reserve asset of choice. The 50% increase in gold prices from 2022 to 2024 has been largely attributed to this wave of official sector buying. Over the past three years, central banks and other official institutions have averaged net purchases of around 900 tonnes per year, nearly three times the long-term average of approximately 350 tonnes.
Silver In Command
China’s $10 billion subsidy for solar panel manufacturing is accelerating silver demand, alongside growing needs from EVs, semiconductors, and other clean technologies. Industrial usage is projected to exceed 700 million ounces by 2025, cementing silver’s position at the heart of the green transition. Over the past two decades, industrial demand has climbed from 40% to 55%, while photography has declined from 24% to just 2%, reflecting a clear shift toward high-tech, price-inelastic applications.
However, supply isn’t keeping up. Global mine production has dropped by nearly 70 million ounces since 2016, leading to reported supply deficits and reduced inventories with industrial demand forecast to rise 46% by 2033, higher prices and fresh mining investment will be essential to bridge the gap. Recycling, once a key secondary source, is also faltering. Fewer discarded electronics, longer product lifecycles, and reduced government support—particularly in China and Europe—have curbed recycling flows. Lower scrap prices have further weakened incentives. As a result, recycling can no longer offset the drop in mine supply, tightening the physical silver market and amplifying the structural deficit.
ETF Flows in Asia
Source- World Gold Council.Data as on 30-June-25. The above graph is used to explain the concept and is for illustration purpose only and should not be used for development or implementation of an investment strategy. Performance results have many inherent limitations and no representation is being made that any investor will, or is likely to achieve. Past performance may or may not be sustained in the future and is not a guarantee of future return.
Gold ETF flows in Asia surged in mid-2025, peaking at over 60 tonnes in June—a record high in recent years. This coincides with gold prices hitting US$3,250/oz, driven by increased demand amid global macroeconomic uncertainty and currency concerns.
After years of modest, fluctuating flows, 2024–25 has seen a clear upward trend, with ETF inflows rising alongside prices. The sharp jump reflects a raise in gold allocation via ETFs, amid declining yields, de-dollarization, and regional macroeconomic pressures. July saw a slight pullback, potentially due to profit booking, but demand indicators remain stable as gold trades close to its recent highs.
Conclusion: Gold and Silver in a Changing World
As the global economy navigates rising inflation, geopolitical uncertainty, and a shift toward cleaner technologies, gold and silver have re-emerged as critical pillars of resilience and relevance. Gold, backed by record central bank buying and investor flows, continues to serve as a trusted hedge against financial instability. Silver, once tied to photography, is now firmly anchored in the future—powering solar panels, electric vehicles, and semiconductors. Yet, while demand is rising rapidly, supply remains under pressure. Falling mine output, moderating recycling activity, and shrinking inventories are tightening both markets. Whether as a store of value or an industrial essential, gold and silver are no longer just historical assets—they are timely tools for a world in transition.
Source: LBMA, Bloomberg, World Gold Council & Metal Focus.
Disclaimer: This article has been issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact. The Sector mentioned herein is for explaining the concept and shall not be construed as an investment advice to any party. The information / data herein alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party. All opinions, figures, estimates and data included in this article are as on date. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Investors should assess their risk appetite and investment objectives before making any investment decisions. This content is for informational purposes only and does not constitute financial advice or a recommendation to invest in any particular asset class. Readers shall be fully responsible/liable for any decision taken on the basis of this article. Past performance may or may not be sustained in the future and is not a guarantee of any future return.
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