Gold, silver glitter while stocks lag; Deepak Shenoy on what might shine next in 2026 portfolios

Gold and silver have dramatically outperformed equities over the past year, leaving investors and advisers debating whether the metals’ run can persist or if equities will reassert dominance by Diwali 2026. From Diwali 2024 to Diwali 2025, the Nifty50 returned about 6.7%, while gold climbed roughly 63% and silver surged about 73% — moves driven by a mix of global price action and rupee depreciation.

Deepak Shenoy, founder of Capital Mind, laid out the trade-offs on a recent podcast: “Gold has this problem of being a completely dead asset that can’t be used for anything else other than price appreciation,” he said, while noting silver’s distinct industrial links make its price behaviour more complex and episodic.

Why metals rallied

Shenoy point to geopolitical uncertainty, shifts in global capital flows and macro policy concerns as the backdrop for safe-haven demand. Silver’s gains, Shenoy argues, were amplified by idiosyncratic supply issues in India — a temporary import routing via duty-free channels and a subsequent clampdown constricted domestic physical availability, pushing rupee-priced premiums higher. That shortage widened the gap between ETF prices and underlying spot, drawing speculative interest and retail flows.

Structural differences matter

Shenoy emphasises the fundamental difference between gold and silver: gold is principally a monetary and store-of-value asset, whereas over half of silver’s annual demand is industrial — notably photovoltaics, electronics and EV components. That industrial tie means silver’s price can spike when supply glitches or demand surges occur, but it also creates more elastic supply responses: higher prices make marginal mining and by-product recovery economical, which can expand supply and blunt long-term price escalation.

Lessons from history and market mechanics

Shenoy recalled the Hunt brothers episode of the late 1970s and early 1980s — a cautionary tale about attempted cornering and the eventual supply response that crushed prices. He warned investors that commodity rallies can attract new supply or substitution that erodes windfalls, and that temporary ETF premiums often normalise quickly once imports or minting catch up.

Where equities fit in

Despite the glitter, Shenoy and other commentators stress equities’ long-run edge. Historical analysis suggests equities tend to outperform gold in 70% of rolling 10-year periods — reinforcing the case for equities as the primary engine of wealth creation while metals serve hedging or tactical roles.

Portfolio takeaways

Advisers quoted in the discussion recommend modest, disciplined allocations to precious metals — token positions (2–10%) depending on risk appetite — rather than large, conviction bets. Use metals tactically: capture gains and rebalance into equities when valuations become attractive. Silver may reward momentum or timing plays; gold offers an inflation/uncertainty hedge; equities remain the long-term growth vehicle. Diversification beyond domestic markets and small allocations to alternatives (Bitcoin, foreign stocks) can add resilience, but each carries distinct regulatory and volatility risks.

For investors heading into Diwali 2026, the question isn’t which asset is universally “best,” but how to balance growth, hedging and timing — and to avoid treating short-term runs as a permanent replacement for disciplined equity investing.