Tata Mutual Fund allocates 70% of its precious metals investment to gold, citing its status as a safer hedge against economic uncertainty, while recognising silver’s potential amidst supply-demand dynamics and industrial demand trends.
Tata Mutual Fund is favouring gold over silver in a 70:30 split, arguing that the yellow metal remains the cleaner hedge against macroeconomic uncertainty, currency weakness and shifting market sentiment. In its outlook, the fund house said gold has recovered in recent weeks as softer US economic data and easing bond yields supported prices, although it expects near-term volatility to persist as investors react to interest-rate expectations, the dollar and moves in bond markets.
The firm remains constructive on gold over the medium to long term, pointing to structural support from central-bank buying, steady investment demand and the case for portfolio diversification. It said official-sector purchases rose to 289 tonnes in the second quarter, the strongest second-quarter figure on record, lifting first-half buying to 345 tonnes. Tata Mutual Fund also said gold has increasingly been treated by investors as a defensive asset rather than a trade tied to growth.
Silver, by contrast, has a dual identity as both a precious metal and an industrial input, which gives it greater upside in expansionary periods but also more sensitivity to economic swings. Tata Mutual Fund said the metal could benefit from demand linked to electronics, artificial intelligence hardware, renewable-energy infrastructure and solar applications. But it also warned that softer solar installation trends and easier supply conditions have reduced some immediate support, leaving silver more exposed to the wider global growth backdrop.
That difference has been visible in relative pricing. Tata Mutual Fund said the gold-silver ratio moved from about 51 in May to 70, signalling a stronger market preference for gold. Even so, the house is not dismissive of silver’s long-term prospects. It said 2026 could be the sixth straight year of deficit in the silver market, with demand still exceeding supply, and noted that China’s large role in refining and reserves could shape availability. Because silver tends to move more sharply, the fund recommends staggered investing over the medium to long term. Tata Mutual Fund has also separately promoted systematic investment plans in precious-metals fund-of-funds as a disciplined way to build exposure without the practical hurdles of holding metal directly.
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