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Kolkata: Strong industrial demand, weakening dollar, global supply squeeze and rising demand from the investors and jewellery sectors -- all these tailwinds are continuously pushing the price of silver higher. Spot prices in silver have reached the unimaginable levels of Rs 2 lakh per kg. In the global markets, the price has topped $53/ounce.
Veteran investor, banker and former CEO of prominent AMCs has recently remarked "Silver is gold on steroids" and that's no hollow rhetoric. He has also explained why he thinks the white precious metal can generate high double-digit returns in 2026 too, thanks to the demand generated by the fast expanding AI, EVs and renewable energy sectors.
While silver used to play the second fiddle to gold traditionally, in 2025, it has put gold behind in rate of returns. “In the previous two great precious metals bull markets, Silver has performed as ‘Gold on steroids. In 1979-80, Gold went up 3x, Silver went up 7x. In 2007-2012, Gold was up 2x, Silver went up 4x,” he was quoted in the media as saying. “In terms of Silver to the S&P 500 ratio, there is still a lot of runway for Silver to go even higher,” Bagga had added.
The triggers of the bull run in silver are quite a few. First and foremost, there is a demand supply gap that is not going to be fulfilled soon. There are two broad sources of supply of silver -- mining and recycling. Global prices hit a new high as global deficits deepened for the fifth year. According to analysts, the total deficit in silver supply is supposed to reach about 820 million ounces by the end of 2025. Interestingly, this amount is equal to the entire year of average global mine production.
There are few sectors which are recording fast rise in demand. These are high-performance electronics, solar power industry, investors in both the global and domestic sectors. Also, India imports a lot of silver every year. What was at 3,600 tonnes in 2023 has risen to more than 7,000 tonnes in 2024. The declining value of the rupee against the US Dollar is also pushing up the prices. Investments are rising both in physical silver and silver ETFs.
The Silver Institute and Metals Focus has said that industrial applications account for more than 50% of the total global silver consumption. A report of Axis MF Research also states that solar energy, electric vehicles, data centres and semiconductors are driving industrial demand of silver. And since these are important for a green economy, the demand is going to rise in the foreseeable future.
As the prices zoom, the risks for many investors rise too and investors need to be careful. Overvaluation is always a potential risk. Bouts of profit-taking can result in phases of price consolidation, and a stronger dollar on the global map can bring down the prices of precious metals. Easing geopolitical tensions can also bring down the prices as can a downturn in copper prices. Outlook for silver has been described as constructive though volatility could rise in 2026.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, any form of alternative investment instruments and crypto assets.)
