New Delhi, Oct. 12 -- Gold has long held the spotlight, but silver is quietly carving out its moment, wooing investors with its strong returns and rising industrial demand. Over the past year, silver funds have surged about 77% on an average, and gained 35% over three years, outpacing gold funds, which returned 61% and 32%, respectively.

A mix of industrial demand, safe-haven buying, and persistent supply deficits has fuelled the rally. Silver's growing use in electric vehicles, solar panels and electronics, coupled with disruptions at major copper mines where it is produced as a byproduct, has tightened supply.

The surge in prices has pushed silver exchange-traded funds of several fund houses to trade at premiums of up to 18% last week...