Silver at ₹2 lakh/kg: What this means for investors now
What's the story
Silver futures on the Multi Commodity Exchange (MCX) in India have hit a new high of ₹2,01,615 for the March contract. The surge comes after months of anticipation and has piqued the interest of investors and traders alike. The question now is whether this rally is sustainable in the long run or if it's time to book profits.
Market analysis
Silver's remarkable performance in 2025
Silver has been on a winning streak this year, extending its gains from 2024. Axis Direct noted that "Silver extended its golden run in 2025 after delivering more than 20% return in 2024." The metal broke out of a multi-year consolidation phase and formed a large Rounding Bottom breakout pattern between 2011-2013. It also surpassed neckline resistance at $50/oz to hit an all-time high of $64 in global market.
Market drivers
Factors behind silver's 2025 rally
The rise in silver prices this year can be attributed to several fundamental and macroeconomic factors. Axis Direct noted a historic repricing event in the silver market, marked by its decoupling from gold. The rally was driven by "the convergence of industrial scarcity and monetary tailwinds," reflecting structural supply-demand imbalances. A persistent supply deficit since 2021 has also contributed to this trend, with projections indicating continued deficits into 2026.
Demand factors
Green technologies and logistical constraints impact silver demand
The rise of green technologies, particularly in the photovoltaic (PV) sector, has significantly impacted silver demand. Demand from the solar sector has more than doubled since 2020 and now accounts for over 21% of total demand. Logistical constraints and tariff risks in the US have also intensified supply-side pressures, further contributing to silver's price surge.
Market caution
Caution advised amid silver's price surge
Despite the strong uptrend, some market experts are urging caution. Justin Khoo, Senior Market Analyst at VT Markets, said that while silver's all-time high above $63/oz shows the strength of the current bullish momentum, its rapid ascent also calls for caution. He advised waiting for a healthy retracement before considering new trades but maintained that the broader outlook remains supportive.
Future projections
Long-term outlook for silver remains positive
Despite the recent correction, the long-term outlook for silver remains positive. Axis Direct observed that "A sustained monthly close above $67 could trigger a multi-year uptrend targeting $76-$80." In the Indian market, they expect any correction down to ₹1,70,000-₹1,78,000 can be used for staggered accumulation with a target of around ₹2,40,000 by 2026.