Indian households have been accustomed to metals for centuries. In particular, gold and silver have been viewed as a safe investment over the long term, as opposed to a commodity that can be sold through trading. However, what has changed in the last few years is the way that people are investing in metals and the reasons for this renewed focus on metals.

Why do Investors Utilize Metal Investments?

Metals are often viewed as a type of asset that retains value when there is great uncertainty in the economy. Unlike paper money that depreciates in purchasing power due to inflation, over the long-term, most metals maintain or even appreciate in value. Over the last few decades, globally and in India, there has been a significant increase in the exposure to metals during periods of:

• High inflation
• Currency depreciation
• Economic / Financial instability
• Political / Geopolitical stress

In addition to these reasons, in India, the cultural significance (i.e. gold and silver) provides a fundamental support for rise in demand for these metals. However, today’s rise in demand is predominantly being driven by the logic of portfolio investing as opposed to just tradition.

Gold: Remains a Centerpiece but Not the Singular Focus Anymore

Most Indian investors continue to allocate a majority of their metal assets to gold; there are several reasons why over a long-time frame of years, gold has seen large increases in the price of gold from an Indian perspective including:

• Global Price Increases
• The depreciation of the Indian rupee
• Increased demand for gold during times of uncertainty.

With the increased price of gold jewellery now slowing the gold jewelry purchase activity, the increase in demand for investments in gold-based ETFs and bonds is an indicator that many Indian investors wish to own gold but in more flexible and lower-cost vehicles.

Gold’s Value in a Portfolio:

• Long-term Store of Value
• Hedge Against Loss of Purchasing Power (inflation) & Foreign Currency Risk
• Defensive Investment, Not Growth Investment
  

Silver: The New Topic of Discussion

As both a precious metal and as an industrial commodity, silver is receiving increased investor attention due to it being a hybrid of gold and copper:

• Precious Metal Value
• Industrial Commodity Demand (i.e. electronics, solar power, and electric vehicles).

Because of these two categories of investor demand, silver is much more volatile than gold, but, also provides the investor with greater upside in periods of rapid growth of industrial commodities.

Recent Trends:

• Significant price cycles for silver in periods of economic recoveries
• Increased demand for silver investments through ETFs due to more convenient access
• Increased relevance of silver for investments backed by the rising usage of renewable energy sources.

Silver’s price reflects both demand from investors and demand due to industrial activity. It’s possible for silver to outperform gold during times of growth, but silver prices can also fall more quickly than those of gold during times of lower growth. For retail investors, silver makes sense as a medium-term investment before being considered as an asset that only provides safety.

Consumer Demand and New Uses for Copper – Should Consumers Invest in Copper?

There has been an incredible rise in investor interest in copper investments. Copper has no similar safe haven status as gold. However, it is more closely related to:

• Infrastructure building
• Power grid additions
• Electric Vehicles and Renewable Energy Support
• Urbanization and Industrial Expansion

Thus, rather than serving as an indication of investor fear, copper prices affect the economy as a signal of some level of economic activity.

So, can copper be part of a retail investment portfolio?

Absolutely, but for a different reason than gold or silver.

Copper should therefore be seen as:

• A growth-based metal (not a hedge),
• As a proxy for long-term global electrification growth
• As a cyclical asset that benefits from overall economic expansion

More and more retail investors are getting access to copper through commodity- and linked-fund investments and the like, providing them greater access to participate in such investments without having to do so by trading the commodity itself (i.e., the case with wealth management tools).

Copper does not replace either gold or silver; however, copper does provide additional growth exposure and therefore diversifies alongside the growing safety associated with gold and silver.

How Indians Invest in Metals Today

Metal	Physical Forms	Financial / Market-linked Forms
Gold	Jewellery, coins, bars	Gold ETFs, Sovereign Gold Bonds (SGBs), gold funds
Silver	Jewellery, coins, bars, utensils	Silver ETFs, commodity funds
Copper	Utensils, wires, scrap (non-investment)	Commodity ETFs, metal funds, mining stocks

While physical ownership has dominated Indian households for decades, structural frictions are pushing investors toward financial forms of metal exposure.

Why Financial Forms Are Replacing Physical Metals

Metal	Issues with Physical Holding	Why Financial Forms Are Gaining Ground
Gold	Making charges, purity risk, storage & security, low liquidity for jewellery	Lower cost, transparent pricing, easy liquidity, no storage risk
Silver	Bulky storage, tarnishing/oxidation, higher volatility	ETFs remove storage issues, easier portfolio allocation
Copper	Not investment-grade physically, corrosion risk, no standard purity	Financial exposure aligned to industrial & electrification growth

ETFs are Making Metal Investing Easier

Earlier, investors could invest in precious metals mainly by buying jewellery. Today, this has changed. Investors now prefer financial products like Exchange Traded Funds (ETFs) and mutual funds, which allow them to invest in metals without the need to physically store gold or silver.

This shift is clearly visible in the sharp rise in folio counts under the “Other Schemes” category. The number of folios increased from 31.6 lakh in March 2020 to 414.7 lakh in March 2025. This growth reflects a rapid increase in retail participation in metal-based ETFs such as gold, silver, and other metal funds.

The trend shows that investing in metals is no longer limited to a small group of investors. Instead, it is becoming more mainstream. Investors are increasingly choosing simpler, more transparent, and more liquid investment options.

What AMFI Data Reveals About Investor Behaviour

Institutions are already using ETFs as the preferred route to gain metal exposure. Retail investors are not.

• 70% of institutional assets sit in “Other Schemes” – Gold ETFs, Silver ETFs, commodity-linked ETFs, and passive funds
• Retail investors remain equity-heavy – Nearly 90% of individual investor folios are concentrated in equity-oriented schemes
• Metal ETFs still see minimal retail participation – Exposure to gold, silver, and commodities remains largely physical, not financial

Two mindsets. Two strategies.

• Institutions treat metals as a core strategic allocation
• Retail investors still view metals as non-core or outside formal portfolios

The gap that matters

Retail portfolios are structurally under-allocated to metals via financial products.

As awareness of ETFs improves, gold, silver, and commodity ETFs could see rapid retail adoption, not because institutions are late, but because retail investors are.

By utilizing ETFs, investors can:

• Gain exposure to the price of metals without the need to hold them in physical form.
•  Easily access through brokerages to buy and sell on an exchange.
• Eliminate issues related to purity (from refiners), safety (from theft), storage, and security

This is particularly important in the case of silver and copper, which are both bulkier to store in physical form and are subject to greater price fluctuations than gold or platinum.

How to Include Metals in Your Investment Portfolio

Typically, retail investors will see metal(s) provide their best returns when:

• Each type (gold, silver, copper) will make up between 10-15% of the total portfolio, combined
• Gold will provide stability to the overall portfolio
• Silver will balance between growth and stability (the Hybrid Between Gold and Copper)
• Copper will provide long term investment exposure to industrial future growth trends

All types of metal do not provide regular income (like dividends or interest). Their value is based on expected appreciation.

Increasing interest levels in investing in silver and copper demonstrates an increase in the virtual understanding of the metals markets by retail investors.

The move has gone from an emotional based buying approach to a strategy-based allocation process.

In conclusion:

Gold remains a core component of any retail investor’s portfolio. Silver is expected to play an increasingly important role, while copper is emerging as a larger investment theme for long-term investors.

Each metal serves a distinct purpose. Understanding these differences can help investors manage volatility and build portfolios that align with long-term economic and industrial trends.

The growing maturity of investing in India has enabled retail investors to view metals not merely as assets for storage, but as practical tools for long-term financial planning.

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Source:

Association of Mutual Funds in India (AMFI)