Gold Vs Silver: What to buy as Israel-Hamas conflict triggers bullion’s appeal?

After weeks of underperformance, shine in bullion returned as the first shot hit Israel and since then the price trajectory has largely been northwards with the crisis only deepening by each passing day. Experts remain bullish on the prospects of precious metals even as they pick their preference between gold and silver with a view to make the most of the crisis.

Hardik Mangla, Founder of jewellery brand Demi Luxe said that the traders should look to capitalise on the current bullish trend and make fresh buying positions in gold and silver as the escalating tensions between Israel and Palestine is driving the investors toward safe-haven assets.

The remarkable gains reflect the shifting investor sentiment, he said, as he vouched for gold on account of greater stability and its intrinsic quality to preserve value of the investments. Silver, on the other hand could potentially give higher returns but also runs greater risk of price erosion, being highly volatile.

Mangla said that the decision to choose between the two will hinge upon an individual’s risk tolerance and investment objectives.

Since the onset of the crisis, gold has gained nearly 8% and is now trading at five month high levels.

The current crisis has triggered inflows towards the US dollar and gold as investors flee risky assets for safer gold, Naveen Mathur, Director – Commodities & Currencies at Anand Rathi Shares and Stock Brokers said. Gold has gained at the expense of the greenback as investors have booked profit following an 11-week rally in the dollar index (DXY), Mathur informed.
His advice to investors in bullion is to remain long in Gold at lower levels till the geopolitical risks persist.For him, Silver remains a riskier asset amid the geo-political crisis and fresh positions should be made with a 1-2 year view. This precious metal is off 10% from its peak and long term view could still return 12-15% in his opinion.

Silver finds its appeal not just as an investment alternative but also has industrial use which makes it more volatile than gold.

Mithun Vijay Kumar, Political Analyst and Author said that gold is the more liquid of the two and widely accepted because of its stability over silver. “Silver may be a better option for investors who are looking for a more volatile asset with more upside potential. When choosing between gold and silver as an investment, it is important to consider your individual circumstances and risk tolerance,” Kumar highlighted.

Echoing similar sentiments Veer Mishra, CoFounder of Plus said that gold was more stable and highly liquid against silver. Moreover, gold as an asset has a worldwide appeal and its value is unrelated to the health of any specific economy. But silver, being less expensive than gold, has a larger investor pool and one can utilise volatility to make high short term gains, Mishra said.

Mishra also remains upbeat about the long term prospects of silver as global focus shifts to sustainable energy.

Anuj Gupta, Head Commodity & Currency, HDFC Securities highlights an interesting trend where Silver ETFs have seen a higher investor interest than gold ETFs. Since the launch of the first silver ETF in 2022 in India, the overall count has picked-up to seven with assets under management (AUM) as of March 2023 at Rs 1,792 crore.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)