Gold vs Silver in India: Tracking Risk-Adjusted Performance Across Market Cycles

Gold and silver have always occupied a special place in the Indian financial landscape, not only as investment assets, but also as instruments shaped by culture, tradition, and long-standing behavioural preferences. Despite this shared status as precious metals, their investment performance differs substantially over time, particularly when examined through the lens of risk and stability. This study undertakes a comparative evaluation of gold and silver in India using domestic price data and a dynamic risk–return framework, with the objective of offering evidence-based insights that are directly relevant to Indian investors. The analysis is based on daily price data from the Multi-Commodity Exchange (MCX) covering the period from June 2019 to September 2025. This timeframe is especially significant, as it captures multiple phases of economic stress and recovery, including the COVID-19 pandemic, inflationary pressures, geopolitical uncertainty, and commodity market volatility. Instead of relying on static full-period averages, the study employs 180-day rolling Sharpe, Sortino, and Omega ratios to assess how the risk-adjusted performance of gold and silver evolves. This rolling approach allows the analysis to reflect changing market conditions and shifting investor behaviour more realistically. To place the performance of precious metals in a broader commodity context, copper and aluminium are included as reference industrial metals. Their inclusion helps distinguish the relatively defensive nature of gold from assets that are more closely tied to industrial demand and economic cycles. The findings reveal a clear performance hierarchy among the four metals. Gold consistently demonstrates the most stable and resilient risk-adjusted performance, with moderate volatility, controlled downside risk, and a persistent dominance of gains over losses across most market phases. Its performance strengthens notably during periods of macroeconomic uncertainty, reaffirming its role as a defensive and stabilising asset in the Indian context. Silver, by contrast, exhibits significantly higher volatility and prolonged phases of weak risk-adjusted returns. While it experiences occasional short-term improvements, these periods are infrequent and less sustained than those observed for gold. The results reflect silver’s dual character as both a precious and an industrial metal, making it more sensitive to cyclical fluctuations and speculative forces. Copper and aluminium display the strongest upside potential during favourable economic phases, but this is accompanied by sharp downturns and deep risk-adjusted troughs, highlighting their suitability primarily for tactical rather than stability-oriented investment strategies. The study provides clear empirical support for gold’s position as India’s most reliable investment metal, while suggesting that silver and industrial metals are better suited for selective, timing-based exposure. The rolling risk-adjusted framework used in this research offers a robust foundation for understanding commodity performance in a dynamic and uncertain economic environment.