New Delhi: 

The significant upsurge in investments in silver ETFs is signaling a new trend in the market, which is considering ETFs as an alternative investment tool. The recorded surge in silver ETFs has outpaced even that of gold in India. 

The investment totals Rs 16866 crore in silver ETFs, up from Rs 7473 crore last June 2024. The AUM (asset under management) of silver ETFs has seen a remarkable rise, witnessing a 125 percent increase in the total pool investment. 

During the same time frame, AUM of gold ETFs has risen to Rs 62452 crore, up from Rs 34355 crore; thereby, gold ETFs have seen a rise of 81 percent.

Should you invest in silver ETFs?

Silver being an important and precious metal makes for a good option for investment. However, there are fluctuations, and silver price changes are functions of geopolitical developments and macroeconomic conditions. The price of silver has increased. suddenly, which led to the current buying frenzy of silver ETFs.

According to market experts, investors should keep in mind the industrial demand of gold and silver, which drives the prices of these important commodities. Gold funds make for good long-term investments and as a hedging tool against inflation, while silver investments make for investment allocation.

Silver prices are at a 13-year high, and investments in it bring both risks and opportunities.

The data says that till May 2025, over 837,000 silver ETF investors opened their folios. The given data implies the new exposure of investors towards silver ETFs. Approximately 6 lakh investors were there in January 2025. In Indian markets, this new investment tool opened to the public in November 2021 after the SEBI approval.

Net inflow in silver ETF:

Silver ETFs witnessed net inflows of around Rs 853 crore as against the net buying of around Rs 291 crore in gold ETFs despite the gold price being higher than ever. The gold price has surged around 43 percent as compared to silver, which went up around 24 percent in the time period between June 2024 and 2025.

Demand for silver has been increasing since 2021 in the background of limited supply. There are several reasons for this demand, such as silver being both a valuable commodity and a critical element in the industrial production chain.

The silver is especially used in renewables, including solar energy and automobile manufacturing. In other words, from industrial use to jewelry needs, from uses in digital photography to renewables, is contributing to its higher demands.

Safe-haven appeal:

There are several other factors too that are parallelly contributing to the silver demand. These are geopolitical uncertainties, safe-haven appeal, and a hedging tool for combating inflation.

According to market experts, the reason why silver is appealing to investors is because of the convenience that the Silver ETFs and Silver FOFs bring to the investors.

Possession without physical ownership and silver being used in future industrial products are the factors that are driving this surge. Silver is offering investors a unique opportunity for portfolio diversification too.

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