Gold, Silver ETF: In June 2025, people put a lot of money into gold and silver exchange-traded funds (ETFs), and it became a record month. Gold ETFs got ₹2,080 crore, and silver ETFs were not far behind, with ₹2,005 crore in net inflows. Together, they pulled in ₹4,085 crore, which is the highest ever in a single month. These numbers show how much people are interested in precious metals these days, especially after the recent price jumps in both gold and silver.
Why Gold and Silver Inflow is high?
Gold prices have been going up steadily for the past two years, and one big reason is that central banks are buying more gold. This has made investors feel like gold is a safe place to park their money. A fund manager from Kotak Mahindra AMC, Satish Dondapati, explained, “Gold prices rose in June. Also, growing uncertainty led investors to view gold as a safe haven.”
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Silver is used a lot in industries like solar energy, electric vehicles, electronics, and even AI chips. These industries are growing fast, which means silver is in high demand. According to Dondapati, “There has been strong demand from industries like solar power, electric vehicles, electronics, and AI chips.” In fact, about 1/3rd of the global demand for silver comes from clean energy and renewable sources.
Vikram Dhawan from Nippon India Mutual Fund pointed out that the supply of silver is limited, which has created a gap between how much is needed and how much is available. He said, “This structural demand is expected to keep the silver market in deficit in the coming years.” Because of this, silver prices in India have gone up a lot recently.
When gold prices go up too fast compared to silver, the ratio becomes high, and silver starts to look like a better deal. That’s what happened in April 2025 when the ratio went all the way to 100, which is above the usual range of 50 to 80.
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This is when Gurvinder Singh Wasan from Baroda BNP Paribas Mutual Fund said, “The gold-to-silver ratio reached 100 in April 2025, indicating silver’s undervaluation vis-à-vis gold, as the ratio historically moves between 50 and 80.” After that, silver had its own price rally, and more people became interested in it.
Experts believe that people will keep investing in gold and silver ETFs in the near future because of all these reasons. But at the same time, they also warn about the possible risks ahead.
What Could Go Wrong?
One major risk is if the US raises interest rates. When interest rates go up, bonds become more attractive to investors than gold, which does not give any interest. A stronger US dollar can also pull gold prices down. On top of that, if the global economy gets better, people may stop worrying and start putting money into stocks and other risky assets instead of gold.
Wasan added, “As equity markets pick up, flows into gold ETFs could possibly slow down.”
Silver also has its own risks. Its demand depends a lot on clean energy projects and industries like solar and electric vehicles. If governments like the US cut back on support and subsidies for clean energy, or if China slows down its solar production, silver could take a hit.
Dhawan warned that “this could occur if subsidies and policy support are rolled back in the US under the Trump administration, or if China’s solar manufacturing sector decelerates significantly.”
Another risk is that technology could change fast, and if new tech needs less silver, demand could drop.
Vaibhav Porwal from Dezerv said, “A slowdown in these sectors—due to technological changes or delays in energy transition—can negatively affect silver’s appeal.” Any changes in India’s import duties on gold or silver could affect their prices and performance in the ETF market.
What you should do?
That’s why experts are reminding people not to go too heavy on gold and silver. It’s better to keep their share small in your overall portfolio. Vishal Dhawan from Plan Ahead Wealth Advisors explained, “Exposure to gold and silver should be capped at 10 per cent of the portfolio. Within that, a 75:25 split in favour of gold is recommended.” He also suggested that instead of putting in a big amount all at once, people should invest slowly over time, either through SIPs or STPs.
