Gold and silver rise amid tariffs and turbulence

On Friday, gold hit a high of $3,657.60 an ounce (Source: Kitco Live Gold Prices), while silver traded above $42, its strongest level in over a decade.

In India, the rally has been sharper still: gold has crossed Rs 1 lakh-mark per 10 grams and silver (December Futures) crossed a record Rs 1,28,838 per kg in September (MCX), both record highs. Silver outpacing gold “slightly” this year. 

So, what gives? 

Global price drivers are familiar 

There are expectations of the US Federal Reserve to continue cutting rates (despite inflation and job concerns thereby (re)fuelling the rally), which weakens the dollar and strengthens non-yielding assets like bullion Add increased geopolitical risks (Russia/ Ukraine, Tariff Wars, Iran/Israel among others) and you have the classic recipe for a gold rally. Israel’s attack on Qatar (a global energy heavy weight) threatening a wider conflict, helped the rally move to a higher gear. 

Silver’s appeal is broader 

While it rises alongside gold as a safe haven, it is also in demand from industries like computer chips, solar, electronics and batteries, making it attractive. In the face of both Chinese designs on Taiwan and US restricting chip sales, a critical component in the global AI race, nations are racing to indigenise computer chip production further fuelling the rally.

India’s story has an extra twist 

The recent 50% US tariff on Indian exports has hit sectors like gems, jewellery, and textiles hard. Gujarat’s bullion and diamond hubs report a fall in orders, with 20-25% revenue loss year-on-year. Yet the same disruption has redirected more domestic money into bullion. When trade flows falter, households and businesses may fall back on gold and silver as a store of value.

For investors, the key lesson is not to chase this rally blindly. Precious metals often overshoot in times of stress before settling back. Gold retains its place as a strategic hedge—a 5–10% allocation can work well as a buffer against inflation and crises. Silver is best treated as a tactical play, smaller in size but capable of adding a sharp edge to returns when growth and inflation align. Key rider being rebalancing the portfolio to realign with stated strategic objectives. 

Instruments matter too 

Physical investment gold (cast or minted bar) is cumbersome, with expensive storage and security risks for individuals not to mention purity concerns. It is good for gifting, not so much for investment. 

On the other hand, Sovereign Gold Bonds were the most efficient vehicle—government issued, tracking prices while adding a 2.5% annual yield. However, SGBs have oddly become a casualty of the bullion’s rise – with servicing costs rising, RBI has decided to call in the bonds with no further issuances in the offing. 

Gold ETFs offer security, liquidity, and convenience. Silver exposure, meanwhile, is cleaner through ETFs or thematic funds than physical metal. Both are also mandatorily required to allocate numbered bars to back ETF units trading on the exchange making these instruments convenient, safe, and readily tradable. 

Today’s headlines around tariffs and global turbulence only reinforce why gold and silver endure in portfolios. They are not designed to compound wealth but to preserve it, to function as stabiliser when policy shifts or politics unsettle markets. The smart approach is to keep allocations measured and consistent—enough to provide stability, but never so large as to compromise growth or be at the receiving end of a speculative bubble. However, for any investment shift, deep research and being aware helps with construction and investment management. Consider SEBI registered advisors for external help with larger goal alignments, neutral advice and understanding appropriateness of investments.

Tariffs will come and go. Central banks will change course. But gold and silver remain, steady reminders that in uncertain times, a touch of ballast is worth its weight.