Silver prices might hit ₹2L/kg in India: What's the reason?
What's the story
Silver prices have reached an all-time high of $62.50 per ounce in global markets, following a strong rally this year. The surge is driven by expectations of a more accommodative US monetary policy, which has led to a weaker dollar and lower Treasury yields. In India, silver prices are expected to breach ₹2 lakh per kg due to international benchmarks and sustained industrial demand.
Policy influence
US Federal Reserve's policy shift impacts silver prices
The US Federal Reserve's December policy decision, its first rate cut in months, and Chair Jerome Powell's unexpectedly cautious outlook have triggered a major reassessment of interest-rate expectations. This has resulted in a weaker dollar and eased yields, boosting investor demand for alternatives to dollar-denominated assets like silver. The Fed's December rate cut is seen as a "measured shift" toward easing, though policymakers remain cautious amid inflation pressures and labor-market distortions.
Market dynamics
Silver's dual nature boosts its market performance
Silver is benefiting from safe-haven buying and strong industrial demand, especially from green energy, electronics, and photovoltaics sectors. The combination of a softer dollar and expectations of lower borrowing costs has boosted investments in precious metals. "A softer USD, combined with lower interest rates, supports gold and silver by reducing the opportunity cost of holding non-yielding assets," said analyst Ross Maxwell from VT Markets.
Indian response
India's silver market responds to global trends
In India, silver futures for the March delivery jumped ₹3,736/kg or 1.98% to ₹1,91,800/kg, on the Multi Commodity Exchange. Gold futures for February delivery also rose by ₹173 or 0.13%, to ₹1,30,280 per 10g, as global central banks continue to buy gold actively.