After a 144% rally, silver emerges as a serious investment theme for 2026; how should you proceed

Gold and silver were among the top-performing assets in 2025, though driven by different forces, with gold rising about 62% on central-bank buying, rate-cut expectations and geopolitical risks. Silver surged 144%, aided not only by supportive macro factors but also by tightening supply and rising industrial demand from sectors such as solar, electric vehicles and AI-linked technologies. Once seen as a cheaper alternative to gold, silver is now being reassessed as a structural investment theme rather than a tactical trade as investors head into 2026.

According to equity research platform Equitymaster, what is driving this shift is not just price momentum. Instead, silver is increasingly being recognised for its dual identity: part precious metal, part industrial workhorse. 

Investing in silver in 2026

As per the Equitymaster report, in India, silver demand has remained resilient despite rising prices, with sustained participation across jewellery, physical investment and ETFs. Silver ETFs posted exceptional gains in 2025, climbing more than 150% in a single year as silver prices rallied sharply. The category outpaced gold ETFs and equity markets across three-month, six-month and one-year horizons, establishing itself as one of the strongest-performing asset classes of the year.

This shift points to silver becoming increasingly investment-driven, supporting growing interest in silver mutual funds ahead of 2026.

As silver transitions from a cyclical commodity to a structural theme, the investment vehicle matters. Silver mutual funds, largely structured as funds-of-funds investing in silver ETFs, offer a more disciplined way to participate in this shift, Equitymaster noted.

Unlike direct exposure through physical silver or exchange-traded products, mutual funds allow systematic investing through SIPs, remove storage and purity concerns, and fit more naturally into long-term portfolio frameworks. For investors thinking beyond short-term price moves, this structure aligns silver with strategic asset allocation rather than tactical positioning.

How much silver is enough in your portfolio

Despite its evolving role, silver remains volatile. Equitymaster stated that history shows that sharp rallies can be followed by steep corrections, as seen in 2011 and 2021. That makes allocation discipline critical.

Equitymaster recommended: "For conservative investors, a 2–5% allocation via silver mutual funds can enhance diversification. Moderate-risk portfolios may consider 5–10%, while higher exposure should be limited to aggressive strategies within a well-diversified framework. The key is to treat silver as a satellite holding, not a core driver."

What other analysts recommend

Mirae Asset Mutual Fund has cautioned that silver could face higher drawdown risk than gold in 2026, following its sharp rally over the past year. In its Annual Outlook, the fund house said gold is likely to find support at lower levels due to sustained central bank buying, making it relatively more resilient during periods of market stress.

Within commodities, Mirae Asset currently recommends a balanced allocation across precious metals, with equal exposure to gold and silver. However, it noted that investors may consider a gradual tilt towards gold if the silver rally shows signs of fatigue, both to manage downside risk and to lock in gains after what it described as a historic surge in silver prices.

The fund house also advised caution on fresh allocations, flagging the likelihood of higher volatility. New investments, it said, should be approached with a longer time horizon and avoid aggressive positioning at current elevated levels.

According to Mirae Asset, the strong price gains in 2025 have pushed both metals into overbought territory, increasing the probability of intermittent corrections. Silver, in particular, appears overheated in the near term. That said, the fund house believes any pullbacks are likely to remain contained within a broader positive long-term trend, supported by structural factors.

Explaining silver’s 2025 rally, Mirae Asset pointed to a combination of persistent supply deficits, strong industrial demand and tightening physical availability. It highlighted that COMEX-registered inventories have fallen nearly 70% from 2020 levels. Supply concerns have also intensified after China announced stricter export licensing rules effective January 2026, raising the risk of global delivery stress. The rally was further fuelled by speculative positions and exchange-traded fund inflows once key price levels were breached.

As 2026 unfolds, silver’s appeal lies less in last year’s rally and more in the structural forces reshaping its future. For investors willing to think long term, silver mutual funds may offer a measured way to participate in one of the market’s most quietly evolving themes.