Silver prices surge 175% in a year: Should you invest?
What's the story
Silver prices in India have skyrocketed by 175% in the last one year, owing to supply shortages and rising industrial demand. The metal's inclusion in critical minerals lists and a weakening dollar have also supported its prices. Analysts expect further gains as investment interest continues to rise. The MCX silver price has jumped from ₹87,233 per kilo last year to ₹2,39,787 today.
Market reaction
Silver's remarkable rally and market response
The massive rally in silver prices has surprised global investors and prompted analysts to revise their price forecasts. The upward trend began in April, after US President Donald Trump announced tariffs on all major trading partners. Since then, silver has been closing each month at record highs. In December alone, the metal's price has surged nearly 40%.
Demand surge
Supply shortages and industrial demand drive silver prices
Analysts attribute the stellar rally in silver prices to concerns over supply shortages amid strong industrial and investment demand. For seven consecutive years, global silver supply has failed to meet demand, resulting in a structural market deficit. This trend is expected to continue for a fifth consecutive year in 2025. Unlike gold, silver has big industrial applications with solar panel manufacturing emerging as a major consumer.
Market support
Investment demand and central bank purchases support silver prices
The investment demand for silver, both physical and through ETFs, continues to rise, reflecting the growing confidence in the metal's investment appeal. Reports suggest that global central banks are now shifting their focus from gold to silver after accumulating large quantities of the former. Some central banks are already buying significant amounts of this white metal in international markets, further supporting prices.
Price forecast
Weak US dollar and expert predictions on silver prices
Silver prices have also been supported by a weakening US dollar, which is at its lowest since early October. Investors expect the Federal Reserve to cut rates again next year. Ponmudi R, CEO of Enrich Money, said MCX silver has extended its sharp advance to ₹2,40,935 per kg. He noted that immediate support is placed at ₹2,23,000-₹2,20,000/kg and a sustained hold above ₹2,40,000 could accelerate the rally toward ₹2,50,000-₹2,60,000 in coming months.