With gold reaching record highs, many middle-class investors are turning to Chandi (Silver). We break down the historical ROI, liquidity, and pros and cons of both precious metals.
With gold prices soaring to all-time highs in Pakistan, many middle-class investors find themselves priced out of the traditional safe-haven asset. As a result, Chandi (Silver) is experiencing a massive resurgence as an alternative investment. But is it a better investment?
The Case for Silver (Chandi)
Silver has historically been referred to as "the poor man's gold." In Pakistan, its affordability makes it highly accessible. While 1 tola of gold might cost over Rs 230,000, 1 tola of silver costs only a fraction of that (around Rs 2,600). This allows small retail investors to accumulate physical assets incrementally without needing massive upfront capital.
Industrial Demand Drives Price
Unlike gold, which is primarily driven by inflation hedging and jewellery demand, silver has massive industrial applications. It is essential in solar panels, electronics, and medical equipment. As the global push for renewable energy accelerates, the industrial demand for silver is expected to outpace supply, potentially leading to significant price appreciation.
The Case for Gold
Gold remains the ultimate store of value. In Pakistan, gold offers superior liquidity. You can walk into any Sarafa bazaar and instantly convert a gold biscuit into cash with minimal spread. Silver, being bulkier for the same Rupee value, is slightly harder to store in large quantities and sometimes suffers from wider buy/sell spreads at local jewellers.
Historical ROI Comparison
Over the last decade, gold has consistently outperformed silver in terms of steady, low-volatility growth against the PKR. However, during extreme bull markets, silver often outpaces gold in terms of percentage gains due to its smaller market cap.
Conclusion
If you have substantial capital and want a low-risk, highly liquid hedge against Rupee devaluation, Gold remains king. However, if you are a smaller investor looking for potentially higher percentage returns and can stomach higher volatility, accumulating Silver is an excellent strategy in the current economic climate.