Recent geopolitical tensions, particularly following the US-Israel strikes on Iran, have sparked renewed interest among investors in safe-haven assets, notably gold and silver. As market dynamics shift, traders face the decision of whether to invest in gold ETFs, silver ETFs, or a combination of both.
Experts suggest that the current climate favors gold as a primary safe-haven asset. According to Siddharth Srivastava, head of ETF Product & Fund Manager at Mirae Asset Investment Managers, gold ETFs are generally preferred during periods of increased geopolitical stress, while silver ETFs can complement portfolios due to their industrial demand. However, Srivastava advises allocating a higher percentage towards gold for greater stability. Similarly, Shivam Pathak, a Certified Financial Planner and founder of Asset Elixir, emphasizes that gold ETFs provide a reliable refuge amidst uncertainty, while silver’s industrial exposure makes it more volatile. Both experts recommend that investors consider dedicating 10 to 15% of their overall portfolio to precious metals ETFs, leaning towards gold.
Recent market activity supports this shift, with gold prices recently surging by 4%, reaching Rs 1.68 lakh per 10 grams. Meanwhile, silver futures for March 2026 delivery also rose, demonstrating a strong performance across both metals. Despite going through a correction earlier this year, triggered by various factors, gold remains only 12% shy of reaching its record high.
The heightened geopolitical tensions surrounding oil supply routes, particularly the Strait of Hormuz—through which over 20% of the world’s oil transits—have further complicated the investment landscape. With rising oil prices and inflation concerns, the demand for gold tends to increase, while silver’s performance can be more unpredictable due to its industrial applications.
Over the past month, gold ETFs reported a slight decline of 0.50% in average returns, contrasting sharply with silver ETFs, which saw an average return drop of 23.43%. Looking at longer-term performance, over the last year, gold ETFs yielded an average return of 83.39%, while silver ETFs outpaced them at 175.38%. However, silver’s higher volatility is underlined by its smaller market size and speculative trading activity.
Experts agree that gold ETFs maintain a favorable risk-reward balance amid ongoing geopolitical and macroeconomic uncertainty, while silver investments are likely to experience greater fluctuations based on market sentiment and industrial demand. Pathak advises that both metals should be viewed as long-term portfolio holdings rather than short-term trades, with a recommended holding period of at least five years to act as effective hedges.
In a time characterized by instability, the appeal of precious metals is clear, providing investors with potential security and a strategic avenue in uncertain economic landscapes.