scorecardSilver on an upswing – The metal may offer an attractive investment option as China reopens
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Silver on an upswing – The metal may offer an attractive investment option as China reopens

Silver on an upswing – The metal may offer an attractive investment option as China reopens
Investment6 min read
  • Silver prices have risen nearly 7% so far in 2023 with the current price for 1 kg silver at around ₹76,000 .
  • With rising prices of silver, demand for silver ETFs has also grown.
  • There are expectations that the precious metal’s price may rise in the future with the reopening of China's economy, which consumes the most silver among major economies, and its growing applications in the electric vehicle (EV) space.
Price of silver has rallied in the last few months, as industrial demand also saw a pick up. Besides, a recent fall in the US dollar and rising prices of gold may also attract some buying opportunities in silver.

“Silver returned to the spotlight recently, surging prices near one-year high on demand optimism coupled with a weak US currency. In the overseas market, prices gained more than 25% in the last one-month period while the domestic futures prices rallied more than 20% in the same period,” said Hareesh V, head of commodities at Geojit Financial Services.

He said there are expectations that the industrial demand would grow on hopes of China’s growth outlook and forecast of accommodative policy decisions by the US Federal Reserve. “A correction in the US dollar and a spike in gold prices may also attract more safe-haven buying in the commodity,” he added.

Silver prices have risen nearly 7% so far in 2023 with the current price of 1 kg silver at around ₹76,000 .
Silver prices

1 kg in India

May 1

₹76,000

April 1

₹74,500

March 1

₹66,800

February 1

₹73,300

January 1

₹71,300

Source: Goodreturns

“At the same time, as silver prices are usually extremely volatile in nature, fresh investment in the commodity can be considered only on further corrections. Taking big bets on long positions at these levels seems risky,” said Hareesh V.

Silver ETFs on the rise
With rising prices of silver, demand for silver ETFs (exchange-traded funds) have also grown. The assets under management (AUM) of silver ETFs have reportedly witnessed the biggest jump in five months in March. As of March 31, 2023, there were seven silver ETFs with a total AUM of ₹1,792 crore.

The trend in silver ETFs has been rising since the Securities and Exchange Board of India (SEBI) gave its nod to mutual fund companies launching such products in November 2021.

The mutual fund industry promotes the investment product as a hedge against the ongoing economic uncertainties prevalent across several major global economies and geopolitical risks.

Also, a silver ETF provides easy access to silver without actually physically holding the metal.

There are expectations that the metal prices may rise in the future with the reopening of China's economy, which consumes the most silver among major economies, and the metal’s rising applications in the electric vehicle (EV) space.

Here are silver ETFs that have delivered the highest returns in the last six months and outperformed equity markets as well. While the Sensex was flat in the last six months, most of these funds have delivered 32%-36% returns in the same period.
Scheme Name

Year To Date

1-month gains

6-month gains

Aditya Birla Sun Life Silver ETF

6.52%

8.34%

36.24%

HDFC Silver ETF

5.68%

8.60%

35.15%

Axis Silver ETF

6.04%

6.96%

34.45%

ICICI Prudential Silver ETF

3.99%

6.11%

33.02%

Nippon India Silver ETF Fund of Funds - Direct Plan

9.55%

6.78%

32.99%

Nippon India Silver ETF

4.83%

6.10%

32.99%

DSP Silver ETF

4.78%

6.10%

32.72%

Nippon India Silver ETF Fund of Funds - Regular Plan

9.39%

6.74%

32.69%

Aditya Birla Sun Life Silver ETF Fund of Funds - Direct Plan

9.34%

6.87%

32.63%

ICICI Prudential Silver ETF Fund of Funds - Direct Plan

9.27%

6.50%

32.36%

Aditya Birla Sun Life Silver ETF Fund of Funds - Regular Plan

9.17%

6.82%

32.29%

ICICI Prudential Silver ETF Fund of Funds

9.11%

6.49%

32.00%

Source: Prime database (Data as on April 24)

ETFs are a type of funds that are bought and sold the same as a stock on the exchange, with the underlying asset in this case being silver. The price of the ETF is tracked to an underlying index, which follows the price of silver in the real world.


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