The stupendous rally in silver prices this year has single-handedly outshone the returns of all other asset class. The white metal surged to a fresh high in international and domestic markets on Friday, December 26, with no signs of a slowdown in its rally.
Silver prices jumped nearly 5% and crossed $75 per mark for the first time as expectations for more US rate cuts and rising geopolitical tensions powered precious metals. Back home, silver futures on MCX rose 4% to a record high above ₹2,33,000 per kilogram.
Silver has delivered positive returns to its investors for the past four consecutive years, and this year’s momentum has been influenced by multiple fundamental drivers.
What’s driven a surge in silver?
The first and foremost factor behind the silver price surge has been the US Fed rate easing. As expectations of rate cuts remain high despite the Fed dot plot signalling only one rate cut next year, silver and other non-yielding assets are turning more attractive.
Moreover, silver has also benefited from safe haven flows on account of the uncertain situations created by Donald Trump globally by imposition of tariffs, and the Russia-Ukraine war situation.
The demand-supply mismatch has also driven investor interest in silver. Prathamesh Mallya, DVP Research – Non Agri Commodities and Currencies at Angel One, explained that silver has been in structural deficit for the past 7 years, justifying the rally in the asset in 2025.
Silver sees industrial demand primarily from solar panels, electronics, EVs and other high-tech applications. As industrial demand surged in 2025 on account of solar adoption, renewable energy rollouts, electric vehicles, and electronic production continued to expand globally, and supply remained in deficit, the rally turned sharper.
Aamir Makda, Commodity & Currency Analyst, Choice Broking, said that the market is currently facing its fifth consecutive year of a supply-demand imbalance, with 2025 seeing an estimated shortfall of 95 to 125 million ounces. Since 2021, the cumulative deficit has reached nearly 820 million ounces.
Is silver rally turning unsustainable?
Led by these tailwinds, silver prices have zoomed 166% in a year in the domestic spot market. These gains might look dramatic, but analysts believe they are not purely euphoric. Yet, they cannot rule out some near-term corrections in prices.
Choice Broking’s Makda said that the current scenario of supply and demand suggests that these gains are sustainable. “We may keep a ‘Moderately Bullish’ view for the silver in the upcoming year.”
Looking at the international silver price, the immediate target could be at 161% of the trend-based Fibonacci extension placed at $91, as per him. On the domestic front, silver prices can rise to ₹277,000 per kg in the short-to-medium term.
Meanwhile, Justin Khoo, Senior Market Analyst – APAC, VT Market, said, “Silver’s higher beta means the rally seems tactically stretched. Near-term corrections are likely, especially after such a steep ascent, but these should be viewed as consolidations rather than trend reversals unless inflation fears or fiscal risks fade meaningfully.”
For investors looking to enter at current levels, this might not be the right time, cautioned Mallya. He believes that a three-digit return in 2025 leaves the doors for higher price targets open, as price remains in uncharted territory. “But investors looking to enter at current levels must know that excessive price volatility can lead to meaningful correction, as has happened in previous market crashes of silver.”
In case of a trend reversal, he sees silver plunging to ₹150,000/kg, while his upside target for 2026 is 275,000/kg.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
