Silver prices saw renewed buying interest in Wednesday’s trade as the March delivery futures contract on the MCX surged ₹16,350 per kilogram, or 6.5%, to hit an intraday high of ₹2,68,898, fully recovering from the previous day’s losses.
In the international market, the spot prices have jumped 7% to the day’s high of $86.32 per troy ounce.
The white metal, which remained volatile in recent sessions following a historic plunge, is now showing signs of a rebound as recent US economic data strengthened prospects of Federal Reserve rate cuts, while deteriorating confidence in US assets boosted appeal for safe-haven assets.
The gold prices also strengthened, with April futures delivery rallying ₹3,447 per 10 grams to ₹1,60,250.
US retail sales data released on Tuesday showed that activity unexpectedly stalled in December, highlighting that consumers are holding back on their purchases.
Investors now turned their focus to the delayed US January jobs report to gauge the health of the economy. Weaker-than-expected numbers would support precious metals.
In addition, the US Dollar index remained lower for the third straight session on Wednesday, falling below the 97 mark against a basket of currencies, following reports that Chinese regulators advised financial institutions to limit holdings of US Treasuries.
The move reinforced the view that investors may be rotating away from dollar-denominated assets toward safe havens and emerging markets.
Silver Institute flags sixth straight year of market deficit
While silver prices have retreated sharply from their recent highs, a recent report from the Silver Institute suggests that the bullish rally in the white metal could resume, as demand is expected to surpass supply, keeping the silver market in deficit for the sixth straight year.
In addition, the report stated that the underlying drivers that supported silver throughout much of 2025 have remained firmly in place so far this year. These include tight physical supply in London, a volatile geopolitical backdrop, US policy uncertainty, and concerns over the Federal Reserve’s independence.
The report estimates that physical investment will rise by 20% to a three-year high of 227 Moz, while industrial demand is projected to decline by 2%, falling to a four-year low of around 650 million ounces.
The biggest impact is expected to be felt in the solar sector, as companies continue to use less silver or seek substitutes for photovoltaic panels. Silver jewellery, another significant pillar of the market, is projected to decline by more than 9% in 2026 to 178 Moz, marking its lowest level since 2020.
The report added that total global silver supply is forecast to increase by 1.5% in 2026, reaching a decade-high level of 1.05 billion ounces.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
