Representative image of gold.
Credit: DH Photo
Gold and silver - their ability to outlast paper systems and maintain relevance across centuries is exactly what makes them invaluable in the current moment. In 2025, that timeless appeal is once again in the spotlight as gold surges past $3,475 per ounce and silver trades above $40 per ounce, their highest levels in years, according to Axis MF’s internal research. This rally is not just a reflection of market froth; it underscores their status as wealth preservers across generations—a role that feels deeply relevant in today’s uncertain environment.
Why they still matter
The numbers tell the story: central banks around the world accumulated around 166 tonnes of gold in the second quarter of 2025 alone, with emerging market economies leading purchases as they diversify away from dollar reserves. Exchange-traded funds (ETFs), meanwhile, soaked up more than 400 tonnes in the first half of the year, highlighting strong investor appetite despite record-high spot prices. What makes 2025 a landmark year is not only global demand, but also the domestic milestone, with gold having surged past Rs 100,000 per 10 grams.
If gold remains the classic story of stability, silver has taken the spotlight as the high-beta commodity of 2025. Prices are up at the fastest pace in thirteen years, propelling the metal to $40 per ounce and beyond. Unlike gold, the case for silver is built on a hybrid demand profile that bridges wealth preservation with industrial innovation. These megatrends tie silver directly to global growth and decarbonisation, making it not merely a hedge against uncertainty but also a participant in progress. Investment flows into silver mirror this enthusiasm. ETF holdings hit a record 95 million ounces in the first half of 2025, surpassing the total registered in all of 2024. For investors, this underscores silver’s volatility but also its potential for outsized gains.
Complementary roles
While the metals share safe-haven status, their respective strengths position them as complementary rather than competitive. Gold is the ultimate reserve asset, functioning as a hedge against monetary instability, geopolitical strife, and systemic shocks. Silver, on the other hand, straddles two worlds. It mirrors gold in moments of risk aversion, while also tracking industrial demand as global economies grow and electrify. This dual characteristic makes it a unique player in portfolios.
Commodities are distinct in that they stand outside the traditional equity-bond framework, providing diversification in its truest sense. For families and investors focused on generational wealth, gold and silver occupy a special seat. Balanced exposure to both metals creates portfolios capable of enduring through multiple macroeconomic regimes, transmitting not just assets but financial resilience to future generations.
Risks and considerations
As with any asset class, investing in gold and silver warrants a clear-eyed view of associated risks. Policy remains a crucial variable: a change in the Federal Reserve’s rate trajectory or shifts in US domestic politics could affect global capital flows and in turn, metal demand. On the supply side, miners could respond to sustained high prices by expanding capacity. While silver remains constrained by its nature as a by-product, prolonged rallies could encourage exploration and resource activation over the medium term. Investors must therefore adopt a disciplined, long-term perspective rather than viewing short-run corrections as verdicts on the metals’ fundamental worth.
Commodities for the long haul
Given the evolving dynamics of global markets and the increasing relevance of commodities in portfolio diversification, it is evident that allocating at least 10 per cent to 15 per cent of one’s investment portfolio to these metals can serve as a strategic lever—not only for long-term wealth creation but also for enhancing risk-adjusted returns. This disciplined allocation has the potential to significantly improve the overall investment experience by balancing volatility and offering a hedge against macroeconomic uncertainties.