Silver has been in the spotlight for both Indian and global investors in recent months, with prices experiencing dramatic swings that have generated both excitement and caution. Following the spike in silver prices, investors flocked to silver ETFs, resulting in record inflows and forcing fund houses to temporarily stop accepting fresh investments. The recent sharp correction in both gold and silver has raised questions for investors, whether they are already invested or planning to enter the market.
In this article, we explore the current scenario and future outlook of silver to help investors make informed decisions.
What’s Happening?
Before the festive season, silver ETFs in India were trading at a high premium of around 12–15% as retail investors rushed to buy amid a sudden shortage of physical silver. This strong demand pushed ETF prices well above their actual value.
After the festive rush, global silver prices corrected sharply, turning premiums into discounts. Silver ETFs on Indian exchanges are now trading 15–25% below their recent peaks.
According to The Times of India, the Silver BEES ETF, one of the largest in the country, fell 2.3% to Rs 142 on October 23, down 21% from its all-time high of Rs 180. ICICI Prudential Silver ETF also slipped 1.6% to Rs 149, about 21% lower than its October 14 peak of Rs 188.
Silver ETFs Record Inflows Globally
The sharp rise in silver prices in 2025 led to a massive increase in investments in silver ETFs. According to Axis Mutual Fund, inflows into silver ETFs have nearly tripled compared to gold ETFs this year.
As reported by the Economic Times, in the first half of 2025, global silver ETFs added around 95 million ounces, surpassing the total inflows of the previous year and pushing total global holdings to a record level of about 1.13 billion ounces, valued at over $40 billion.
In India, data from AMFI showed that net inflows into silver ETFs rose sharply to Rs 5,341 crore in September from Rs 1,799 crore in August. In contrast, equity mutual funds saw a 9% drop in net inflows during the same period, marking the third consecutive month of decline. This strong demand, coupled with a shortage of domestic supply, prompted several fund houses to temporarily pause lump-sum and switch-in investments in their Silver ETF and Fund of Fund schemes.
Silver Price Rally and Correction
Before the recent correction, silver prices had rallied around 80% YTD, reaching a record high of $54 an ounce. However, the rally was short-lived, with prices dropping 6% on October 17 (Friday), marking the biggest single-day fall in six months. The decline continued, with silver plunging more than 8% to around $48 per ounce on October 21, its steepest one-day drop since 2021.
The sharp fall in silver prices came as easing US credit and trade concerns reduced demand for safe-haven assets. Positive signals from US President Trump and strong US bank earnings boosted market confidence and bond yields, making metals like silver less appealing. Additionally, profit booking and the easing of a physical silver shortage in London contributed to the correction.
In India, silver futures on the MCX have fallen nearly 16% from their all-time highs.
What Does This Mean to Investors?
For investors, the recent correction offers both caution and opportunity. The sharp fall in silver prices has brought ETF valuations closer to their true worth after weeks of inflated premiums. This means those looking to invest now are entering at more reasonable levels, with lower risk of overpaying.
Short-term traders should stay alert, as prices may remain unstable in the near term. For long-term investors, silver continues to hold value as a portfolio diversifier and an inflation hedge. However, it is wiser to invest gradually through systematic plans or on dips rather than chasing sudden rallies with a lump-sum investment.
What’s Next?
Despite the recent correction, according to the Economic Times, analysts remain optimistic about silver’s long-term prospects. Its role as both a safe-haven asset and an industrial metal continues to support demand.
In the near term, silver may consolidate in the $50–$55 per ounce range before the next rally. Looking ahead, experts expect prices to reach around $75 per ounce by 2026 and $77 by 2027. In India, this could translate to about Rs 2.4 lakh per kg, depending on currency fluctuations.
Strong industrial demand, supply shortages, central bank purchases, and inflation hedging are key factors supporting silver’s growth. Firms like Motilal Oswal and Bank of America highlight that despite short-term volatility, silver remains a strategic investment for both retail and institutional investors.
*The article is for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
