Silver prices might touch ₹2.25L/kg by year-end: What's the reason?
What's the story
Silver has been on a record-breaking spree, hitting an all-time high of ₹2,14,583 per kilogram on the Multi Commodity Exchange (MCX). The white metal's stellar performance is largely due to tight global supply and robust industrial demand. Analysts are now predicting that silver prices could touch ₹2.25 lakh per kg in India by the end of this year.
Market dynamics
Silver's price surge: A confluence of global and domestic factors
The remarkable rally in silver prices is not just a number on the ticker, but a result of several global and domestic factors. These include persistent supply shortages, explosive demand from sectors like solar and electric vehicles, record-breaking overseas prices, and also a surge in Indian imports. A volatile geopolitical backdrop, softening US inflation, and possible interest rate cuts are also contributing to silver's momentum.
Investment trends
Silver outperforms gold in year-to-date returns
With a year-to-date return of 125%, silver has outperformed gold. Jigar Trivedi, Senior Research Analyst at Reliance Securities, said the rally is being supported by "strong central bank buying and sustained ETF inflows."
Market forces
Supply disruptions and rising industrial demand boost prices
On the supply side, disruptions are also playing a role in the price surge. The US has recently classified silver as a "critical mineral," while China, one of the largest exporters, has imposed export restrictions. Ponmudi R, CEO of Enrich Money, said that silver continues to outperform within precious metals due to tight supply conditions, and strong industrial demand from solar power, electric vehicles, and electronics.