By: Tapan Patel, Fund Manager-Commodities at Tata Asset Management.
“While silver’s dual role as a precious and industrial metal positions it as a potent return enhancer, its historical volatility suggests that retail investors should approach the recent rally with caution. Rather than a core hedge, silver is currently best suited for tactical exposure or as a specialized component of a diversified portfolio.
The recent ‘premium-to-iNAV’ episode serves as a vital reminder: during high-demand phases, supply constraints and tariff threats can temporarily disconnect ETF prices from their underlying value. To mitigate this, investors should avoid chasing vertical moves and instead adopt a staggered, systematic entry to benefit from price averaging during inevitable consolidations.
For those already invested, the decision to hold or rebalance should be guided by the Gold/Silver ratio. As the ratio compresses toward the 50 mark—having retraced from the highs of 100 seen in 2025—investors might consider booking partial profits to reallocate into more stable assets like Gold ETFs, ensuring the portfolio remains aligned with their long-term risk appetite.”