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Despite the recent correction in silver prices, experts believe that the metal’s long-term prospects remain strong. According to ICICI Prudential Asset Management Company (AMC), silver continues to be an attractive investment option, driven by its growing industrial usage and its proven ability to protect against inflationary pressures.

In the last three years, silver has delivered an impressive compound annual growth rate (CAGR) of nearly 30%, highlighting its potential as both a safe-haven asset and a high-demand industrial metal.

Silver’s Dual Role: Investment and Industry Use

Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMC, explained that silver serves a dual purpose in the global economy. “Silver functions both as an investment asset like gold and as an essential industrial metal,” he said. Because of this dual nature, silver tends to be less affected by short-term commodity market fluctuations.

Haria added that as economies expand and industrial production rises, the demand for silver naturally increases, which helps maintain its long-term value. This makes silver a crucial component in diversified investment portfolios.

ICICI Prudential’s Pioneering Role in Silver Investment

ICICI Prudential AMC was the first fund house in India to introduce a Silver Exchange Traded Fund (ETF), launched in early 2022. The company recognized silver’s potential to enhance portfolio diversification and launched India’s first Silver Fund of Fund soon after.

According to Haria, silver’s CAGR of 30% over the past three years underscores not only its rising industrial demand but also growing investor interest. “The numbers clearly show that silver is not just an ornamental or traditional investment—it’s an asset class that offers both growth and protection,” he added.

Growing Industrial Demand: EVs, Solar, and 5G Boost

Silver’s industrial applications are expanding rapidly across multiple sectors. It plays a key role in electric vehicles (EVs), renewable energy technologies, 5G telecommunications, biopharma, and medical devices. The metal is also widely used in solar panels, mirrors, automobiles, and industrial batteries, making it an indispensable material for modern manufacturing.

Experts believe that this surging demand, combined with supply constraints, will continue to support silver prices in the coming years. “The gap between demand and supply is one of the biggest factors sustaining silver’s price levels,” Haria explained.

A Hedge Against Inflation and Market Volatility

Over the past six years, silver has outperformed inflation in four of them, reaffirming its status as a reliable inflation hedge. ICICI Prudential AMC believes this trend will likely continue beyond 2025, making silver a strong candidate for investors looking to safeguard their wealth against rising prices.

Investment Strategy: How Much Should You Allocate?

Given its consistent performance and diversification benefits, Haria suggests that investors allocate 5–10% of their portfolio to silver. “It’s a smart way to balance risk while taking advantage of the industrial and economic growth trends that favor silver,” he advised.

ICICI Prudential AMC has recently reopened its Silver Fund of Fund for investment, after temporarily pausing new inflows earlier this year. The reopening reflects renewed optimism in silver’s long-term strength.

Conclusion

While short-term price corrections may cause temporary concern, ICICI Prudential AMC maintains that silver’s long-term outlook remains bright. Its unique combination of investment appeal and industrial importance ensures that the metal will continue to shine—both as a portfolio diversifier and as a key driver of the future economy.