Silver ETFs’ AUM crosses ₹13,500 crore inside three years of launch. Time to speculate?

The response for the silver change traded funds (ETFs) has been fairly sturdy since their launch three years in the past, suggesting the rising lure of investing in valuable metals by Indian traders.

Silver ETFs, which have been allowed by the capital market regulator Securities and Alternate Board of India (SEBI) in November 2021, has seen their property below administration or AUM cross the ₹13,500 crore mark by January 2025, in line with knowledge by Zerodha Fund Home. In slightly over three years, 12 silver ETFs have been launched by fund homes, with over six lakh folios.

Vaibhav Jalan, CBO of Zerodha Fund Home stated, “The rising transaction volumes of silver ETFs are a transparent indication of rising investor curiosity. These ETFs provide a substitute for bodily silver possession, addressing issues about storage, safety, and insurance coverage whereas offering entry to silver’s worth actions.”

Silver: Demand vs Provide

Whereas silver has various functions, in India it has conventional significance, particularly throughout marriages and festivals.

Other than this, it has excessive industrial utilization, with the whereas steel proving to be a significant commodity in sectors like photo voltaic trade and manufacturing. It is also used for making jewelry and funding functions, contributing to its demand.

Since 2021, Zerodha Fund Home stated, the demand for the silver steel has outpaced its provide, sparking an increase in costs.

Based on the estimates by ‘The Silver Institute’, the general industrial demand for Silver has elevated by greater than 55% pushed by its functions throughout varied industries, together with automotive, know-how, prescribed drugs, and photo voltaic power. Silver can also be utilized in manufacturing and industrial fabrication because it doesn’t corrode and has good thermal properties.

Ought to You Make investments?

Analysts see a robust runway for silver costs in 2025. With the silver steel costs buying and selling at ₹100,450 per kg within the futures market, analysts anticipate an extra rally to ₹1,17,000 within the subsequent 12 months.

As per Apurva Sheth, Head of Market Views & Analysis at SAMCO Securities, silver has traded in outlined ranges since 2017, with earlier breakouts resulting in sharp rallies. Given silver’s historic development of surging by 50 per cent from prior highs, Sheth projected a possible goal of ₹1.17 lakh within the subsequent 12 months.

In the meantime, Vishal Jain, CEO of Zerodha Fund Home, stated, “Silver has the potential to play a job in each funding portfolios and fashionable industries. Silver ETFs are a priceless software to diversify one’s portfolios and capitalise on the steel’s distinctive traits.”

Disclaimer: This story is for instructional functions solely. The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint. We advise traders to examine with licensed consultants earlier than making any funding selections.