Silver prices have shown no signs of abating, as the metal continues to scale fresh record highs with each passing day. Multiple catalysts remain in favor of the bullion, making this one of silver’s best annual runs in over four decades.
At the start of 2025, silver was far from investors’ radar, with little expectation that the metal would take center stage and mount a sharp rally in a year marked by economic and geopolitical upheavals, ultimately outperforming most major asset classes.
In the same period last year, MCX silver was quoted at 87,233 per kilo and has gained 175% to trade at 2,39,787, putting it on track for the best annual surge since 1979. The gains are also nearly twice as much as gold’s surge of 80%.
The blistering rally has not only shocked global investors but also led analysts to raise their price forecasts multiple times, as previous targets have been surpassed earlier than expected.
Stingingly, silver began its upward run in April, when US President Donald Trump announced tariffs on all major trading partners, with momentum further accelerating in the subsequent months, closing each month at historic highs. December has emerged as a standout month, with silver prices rising nearly 40% so far and from the April lows, the metal has advanced 1,53,554 per kilo.
In the international market, spot silver price has moved from $28.90 per troy ounce to the current trading price of $79.31.
Industrial demand, supply tightness and weaker dollar fuel silver price surge
Analysts have attributed the stellar rally in silver prices to multiple factors, with the key driver being rising concerns that supply shortages would continue amid strong industrial and investment demand.
Global silver supply has failed to keep pace with demand for seven consecutive years, leading to a structural market deficit, which is forecast to continue for a fifth consecutive year in 2025.
Unlike gold, silver has extensive industrial applications, with solar panel manufacturing emerging as a major driver of consumption. At the same time, investment demand for silver—both in physical form and through exchange-traded funds (ETFs), continues to rise, reflecting growing confidence in the metal’s investment appeal. The metal’s recent inclusion in the US critical minerals list has further strengthened sentiment.
Reports also suggest that global central banks, after accumulating large quantities of gold, have begun shifting their focus to silver. Some central banks are already purchasing significant quantities of the metal in international markets, providing additional support to prices.
In addition, silver prices have drawn support from a weakening US dollar, which remained at its lowest level since early October, as investors expect the Federal Reserve to lower borrowing costs again next year. Strong US GDP data released on Tuesday had little impact on the rate outlook, with markets still pricing in two additional cuts in 2026.
Analysts see strength to continue in 2026 as well
Ponmudi R, CEO of Enrich Money, said MCX silver extended its sharp advance to 2,40,935 per kg, registering a ₹30,000 over the past week and scaling fresh lifetime highs”>steep rise of nearly 30,000 over the past week and scaling fresh lifetime highs, in line with global cues and tightening supply conditions. He noted that the broader rising channel continues to support the move, reinforcing the strength of the prevailing trend.
According to Ponmudi, immediate support is placed at 2,23,000– 2,20,000 per kg, a zone that is likely to attract buying interest on any corrective dip. He added that a sustained hold above 2,40,000 could accelerate the rally towards 2,50,000- 2,60,000 in the coming months.
Strong fundamentals, including rising industrial demand combined with persistent supply deficits, continue to favor a buy-on-dips strategy heading into 2026, he said.
NS Ramaswamy, Head of Commodity & CRM at Ventura, told Mint that silver prices could surge a further 18% from current levels, as the white metal historically tends to outperform during periods of strong global economic growth, particularly given its significant industrial usage.
Disclaimer, This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
