Gold’s secular story is driven by galloping sovereign debt levels across the world, which naturally raises investor concerns around currency debasement, inflation and fiscal instability – leading them to gold – the ultimate safe haven asset.
Energy consumption is on a secular global uptrend drivenby a warming planet and AI data centres. This directly influences silverconsumption as it is a critical input in renewable energy solutions includingsolar panels, EV batteries, windmill components, energy storage solutions andeven in nuclear power generation.
The narrative of silver tagging along behind gold andtherefore the focus on GSR (gold-silver ratio) is outdated. Silver’s storygoing forward is about powering new energy solutions, and less about a tagalong precious metal.
Vikram urges investors to consider gold and silver ascore holdings in their portfolios. Don’t trade them – if you want to trade, there are plenty of stocks that can give you much better trading opportunities.
Silver is displaying volatility that has been its trademark over decades – more reason to avoid trading and focus on long term investment in the metal.
Investors should allocate around 10% of their portfoliosto gold and 5% to silver. You can do this through a mix of some holdings in gold and silver ETFs and an exposure to multi asset allocation funds, which invest a portion of their assets into precious metals.
Nippon India MF’s MAAF currently has 10% allocation togold and around 5% to silver, totaling around 15% in precious metals. Allocations to PMs have moved dynamically over the last 18 months between 10% and 20%.
The current allocation of 15% suggests healthy medium to long term prospects but not nearly as high conviction in short term momentum on the back of volatility that we are witnessing after a huge rally in 2025.