Gold vs Silver ETFs: Which Metal Will Deliver Better Returns After Stellar Gains in 2025?

The year 2025 has proven exceptional for investors in precious metals, particularly for those who placed their bets on Gold Exchange Traded Funds (ETFs) and Silver ETFs. Both asset classes have delivered extraordinary returns, making them some of the best-performing investment options this year.

According to market data, Silver ETFs have delivered an average return of 42% so far in 2025, while Gold ETFs have generated around 40%. With gold prices hitting record highs and silver rallying strongly due to industrial demand, investors are now keen to know which of these two assets will remain more rewarding going forward.

Gold and Silver ETFs Shine in 2025

The rally in bullion prices has directly translated into impressive ETF returns. For instance, UTI Gold ETF recorded a 41% return, Aditya Birla Sun Life Gold ETF delivered 40.48%, and SBI Gold ETF gained 38.22%.

On the silver side, HDFC Silver ETF FOF topped the charts with 43.57% returns, followed by UTI Silver ETF at 43.36%. Analysts attribute this stellar performance to a combination of global economic uncertainty, geopolitical tensions, and expectations of interest rate cuts in the US.

While gold is traditionally seen as a safe-haven asset, silver has an added advantage because of its industrial applications, particularly in electronics and renewable energy. With demand outpacing supply, silver prices have surged rapidly in 2025.

Expert Outlook: Where Should You Invest?

Financial advisors suggest that diversification is key when it comes to building a stable investment portfolio. Gold and silver both play important roles as hedging assets against market volatility.

Advisors generally recommend allocating at least 10% of a portfolio to bullion assets, either through gold and silver ETFs or physical investments. Since both assets are tied to bullion prices, their returns largely depend on global commodity market trends.

Notably, Motilal Oswal Financial Services recently projected that silver could reach ₹1.5 lakh per kilogram by mid-2026, reflecting a bullish outlook. Gold too remains on a positive trajectory, supported by rising central bank purchases and investor demand amid global uncertainties.

Why ETFs Are Better Than Physical Gold or Silver

One of the biggest advantages of Gold and Silver ETFs is the convenience and safety they offer. Investors don’t need to worry about storage or purity, unlike physical gold or silver.

ETFs are also transparent and easy to trade through stock exchanges. With a demat account, investors can buy or sell units just like stocks. Younger investors, in particular, are increasingly preferring ETFs over jewelry or coins.

However, experts note that while Gold ETFs offer higher liquidity, Silver ETFs have slightly lower liquidity since they are relatively new (introduced in India in 2022). Still, for long-term investors, liquidity is not a major concern.

Why Gold and Silver Prices Are Rising

• Geopolitical Tensions: Conflicts and global uncertainty push investors towards safe-haven assets like gold.

• Interest Rate Expectations: Anticipation of US Federal Reserve rate cuts has boosted bullion demand.

• Industrial Demand for Silver: Silver’s use in solar panels, electronics, and electric vehicles is driving prices higher.

• Limited Supply: Both metals are facing tight supply conditions compared to rising demand.

These factors are expected to keep both gold and silver on an upward trajectory in the coming months.

Should You Pick Gold or Silver ETFs?

If you are a conservative investor, Gold ETFs may be more suitable because of their higher liquidity, longer track record, and strong safe-haven appeal.

If you are looking for higher growth potential, Silver ETFs could deliver better returns in the medium term due to strong industrial demand and supply constraints.

Most experts, however, advise that investors should not choose between the two but instead include both Gold and Silver ETFs in their portfolios. Systematic Investment Plans (SIPs) are also available in ETFs, making them accessible for regular investments.

Key Takeaways

• Silver ETFs averaged 42% returns in 2025, outperforming Gold ETFs at 40%.

• UTI Gold ETF and HDFC Silver ETF FOF were top performers in their categories.

• Experts recommend keeping 10% of a portfolio in bullion assets for diversification.

• Silver has a bullish outlook due to industrial demand, with prices projected to hit ₹1.5 lakh/kg by mid-2026.

• Gold remains a strong safe-haven option amid geopolitical risks and central bank buying.

Both gold and silver ETFs are likely to remain attractive in the near future. For investors seeking stability, gold is a reliable choice, while silver offers higher growth potential. In the long run, a balanced mix of both ETFs could provide the best of safety and returns.