Gold Vs Silver: What should you buy this Dhanteras?

Diwali could turn out to be happier for bullion lovers planning to buy gold and silver this Dhanteras, as gold prices have fallen by Rs 1,000 per 10 gram in November while silver prices are down by Rs 1,300 per kg. As an investor, if you are still indecisive whether to buy bullion and which one to choose between gold and silver, here is what experts suggest.

MCX prices may move towards Rs 64,000 to Rs 66,000 per 10 gram in 2024 and a crucial support lies at Rs 56,000, Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart observed. MCX silver contract prices will likely test levels between Rs 78,000 and Rs 80,000 per kg in the upcoming year.

The above estimates translate into a 10% uptick in gold while a 13% gain in silver over the current market price of both precious metals i.e. Rs 59,894 in the case of former and Rs 70,371 for the latter.

These returns by MCX gold in 2023 as on Wednesday, November 8, have been to the tune of Rs 4,900 while those of MCX silver is Rs 1,637, Anuj Gupta, Head Commodity & Currency, HDFC Securities said while suggesting that silver has been more volatile of the two and has given most of its gains after hitting a lifetime high of Rs 78,292. Gold futures, on the other hand, are down from lifetime highs of Rs 61,845.

“With its еnduring rеputation as a havеn assеt, gold offеrs a compelling option for investors sееking long-tеrm wealth prеsеrvation and divеrsification. Its historical rеsiliеncе against markеt fluctuations instils confidеncе in its ability to wеathеr еconomic storms,” said Agam Gupta, Executive Director at Share India Fincap.

On thе othеr hand, silver presents a morе dynamic investment proposition oftеn exhibiting grеatеr pricе volatility comparеd to gold, he pointed out. This inhеrеnt volatility, whilе potеntially amplifying rеturns, also еlеvatеs thе associatеd risk profilе, he warns.
Yadav of Swastika Investmart also sees gold as a safe and secure investment option between the two. “Whether it’s in the form of jewellery, coins, or decorations, gold’s shimmering presence during Diwali reminds us of the values of abundance, generosity, and the victory of light over darkness,” he added.He is also of the view that the growing geo-political tensions across geographies will lend support to the prospects of bullion, going ahead.

A report by Windmill Capital highlighted that gold has trended higher, historically, amid geopolitical uncertainties and has yielded returns of 11% CAGR in the last 20 years.

Gupta of HDFC Securities recommended allocation of 10-20% of gold in one’s portfolio depending upon one’s financial goals and risk appetite.

Meanwhile, Nemallapudi Poorwa Reddy, Founder of Amodha Jewellery suggested diversification of investments, calling it prudent to have a mix of gold and silver in the portfolio, which will spread the risk accordingly. He said while cost will be a key determinant in the choices buyers make between gold and silver, personal preferences and beliefs could also play a big role.

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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)