The year 2025 is proving to be historic for silver. Prices in both domestic and international markets are consistently hitting new records. While gold had already been showing strength, silver has picked up momentum at a much faster pace. According to analysts, the current rally is not just short-term excitement but is supported by strong fundamentals such as expectations of interest rate cuts, geopolitical tensions, and robust industrial demand.
Let us take a closer look at what is driving the market and what the outlook is for the coming period.
What’s Happening?
Silver’s record-breaking rally shows no signs of slowing down. Supported by strong investor demand and supply-side challenges, silver has emerged as one of the best-performing assets of the year. In the international market, silver crossed a new all-time high above $67 per ounce on Friday, with prices already more than doubling in 2025.
In the domestic market, silver March futures on the Multi Commodity Exchange (MCX) were trading around Rs 2,13,412 per kilogram at around 9:15 am, after touching a lifetime high of Rs 2,13,844 per kilogram in the previous session. In the global market, spot silver surged to an all-time high of $69.23 per ounce.
On a year-on-year basis, silver has delivered a massive 138% rally so far, clearly outperforming gold. The current trend suggests that silver’s shine may continue amid strong demand.
Key Drivers Behind Silver’s Record Rally
Geopolitical Tensions and Safe-Haven Demand: The US oil blockade on Venezuela and Ukraine’s attack on a Russia-linked oil tanker in the Mediterranean have increased global uncertainty. This has directly benefited safe-haven assets such as silver.
ETF Inflows and Physical Market Tightness: According to Bloomberg, gold-backed ETFs have witnessed continuous inflows for five consecutive weeks. At the same time, silver is seeing strong demand along with supply tightness across major trading hubs.
Rate-Cut Expectations and Weak US Labour Data: Markets are pricing in two US Fed rate cuts in 2026. Signals from Fed Governor Christopher Waller and the rise in the US unemployment rate to 4.6% have emerged as supportive factors for silver.
Structural Industrial Demand: Rising consumption from solar power, electric vehicles, AI data centres, and electronics has pushed silver’s industrial demand to record levels. The solar sector alone accounts for nearly 15% of global silver consumption.
Falling Inventories and Supply Constraints: COMEX stocks have declined to around 138 million ounces. Shanghai inventories are at decade lows, while London vault holdings have fallen by nearly 40% since 2022.
What Does This Mean for Investors?
The biggest question on investors’ minds is whether there is still room to invest after a sharp 130% rally. Looking at the data, this year has been exceptional for investors who took positions early. A 130% gain is significantly higher compared to equities or other investment avenues.
However, price levels around $66.5 per ounce and above Rs 2 lakh per kilogram indicate that the market is in strong momentum. This rally may be encouraging for investors with a long-term perspective, but for new investors, these levels also signal the need for caution.
What’s Next?
Is this rally nearing its final stage, or is there still more upside left? Analysts believe that silver prices still have meaningful room to rise. According to ET, analysts expect silver prices to gain another 20% from current levels by Q1 2026. This is why a ‘buy on dips’ strategy is being considered more effective at current levels.
Looking at the broader outlook, most experts remain positive on silver. ET estimates suggest that if interest rates are cut in the US and industrial demand stays strong, silver could move towards the $70–75 per ounce range by the end of 2026.
However, analysts have also advised caution due to volatility. Silver’s market is smaller than gold’s, which leads to sharper price fluctuations. Historically, during major moves, silver tends to be about two to two-and-a-half times more volatile than gold. As a result, the risk of a correction after a sharp rally remains.
*The article is for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
