Silver prices jump Rs 45,000 in 10 days! Will the momentum in white metal continue?

"Everything that shines is not gold" is a proverb but it has turned into a rewarding reality in 2025 for the investors who put their money in silver. The white metal outperformed the shiny yellow metal with a wide margin, turning to a multibagger asset class for the year.

Silver has delivered a handsome return of nearly 180 per cent to the investors in 2025. According to the data, it settled at Rs 2,11,000 per kg compared to Rs 79,376 a kg in January 2025. The white metal has soared Rs 45,000 per kg in just 10 sessions from Rs 1,78,000 levels on December 10.

Silver's outperformance is fundamentally driven, benefitting from easing monetary expectations, fiscal uncertainty, and a softer dollar bias but silver has delivered stronger returns due to its dual identity as both a precious and industrial metal, said Justin Khoo, Senior Market Analyst - APAC at VT Market.

The divergence reflects robust industrial demand for silver from solar panels, EVs, and electronics, combined with a persistent structural supply deficit that has tightened physical availability, Khoo said. "Looking ahead, silver’s medium-term outlook remains constructive if global growth holds and real rates stay contained. However, at record levels, volatility risks are elevated."

The global silver market remains structurally tight. Mine production has failed to keep pace with demand growth, largely because over 70 per cent of silver output is a by-product of other metals, limiting supply responsiveness, said Harshal Dasani, Business Head at INVasset PMS. The narrative has decisively shifted towards demand dynamics.

With the recent rally in the prices, silver has become the third most valued asset in the world surpassing asset. However, it still lacks behind Gold and Nvidia in terms of mcap. Globally, the total valuation of silver is $4.04 trillion, which is nearly $600 billion less than Nvidia.

"What sets silver apart is its asymmetry. The market is small, inventories are tight, and industrial demand is non-discretionary. For investors, silver is no longer just a tactical precious metal trade. It is a structurally constrained asset where financial recognition and industrial necessity are converging, setting the stage for sharper, more durable price discovery ahead," Dasani adds.

On the other hand, some analysts believe that the recent rally in silver is beyond its fundamentals and it's unlikely to sustain in the long-term. They suggest that investors should avoid chasing the momentum in the white metals but focus on robust portfolio allocation for long-term wealth creation.

Manish Srivastava, Executive Director, Anand Rathi Wealth believes that Silver's outperformance is possible, but it is unlikely to be as strong or consistent as seen in 2025. Silver tends to outperform in short, favourable phases, typically when rates are falling and industrial demand is supportive but these phases are often followed by long periods of underperformance or high volatility.

Investors with a long-term view should avoid chasing short-term moves in silver. It is better to avoid entering silver as it is tied too closely to industrial demand, said Srivastava. "While silver might appeal to those who want to bet on short-term industrial trends, we do not recommend it as a part of a long-term investment portfolio. "it is better focus on assets that provide stability."