Silver shines in 2025: 61% price surge amid industrial demand, fed cuts, Rupee weakness
According to Tata Mutual Fund’s latest report, silver’s rally is being powered by a unique mix of industrial and precious metal demand. Unlike gold, silver derives nearly 60% of its global demand from industrial uses, and this year several factors have aligned in its favour.
- Oct 4, 2025,
- Updated Oct 4, 2025 11:25 AM IST
While gold has dominated headlines for its record-breaking rally this year, silver has been quietly staging one of the most spectacular comebacks in decades. Starting 2025 at just $28.92 an ounce, silver surged past $46 by late September — a remarkable 61% gain in under nine months. For Indian investors, rupee depreciation has amplified these returns further, cementing silver’s position as one of the hottest assets of the year.
What’s driving the surge?
According to Tata Mutual Fund’s latest report, silver’s rally is being powered by a unique mix of industrial and precious metal demand. Unlike gold, which is largely a safe-haven asset, silver derives nearly 60% of its global demand from industrial uses, and this year several factors have aligned in its favour.
Industrial Demand Boom: Silver is critical in solar panels, electric vehicles, and electronics — all sectors experiencing rapid global expansion. With China’s economy showing signs of recovery, industrial consumption of silver is accelerating. Analysts note that the supply deficit in silver is widening, with demand consistently outpacing fresh supply.
US Fed Rate Cuts: The US Federal Reserve’s 25 basis point rate cut in September 2025 provided a strong tailwind, weakening the dollar and boosting precious metal prices. Expectations of another rate cut in October have added momentum. Historically, falling interest rates and a softening dollar make silver and gold more attractive.
Rupee Depreciation: Since India imports more than 92% of its silver, a weaker rupee makes the metal costlier domestically. While this increases inflationary pressures, it also magnifies returns for Indian investors compared to global peers.
Gold-Silver Ratio: A key metric for relative valuation, the gold-silver ratio, has slipped from 85 in early September to about 81. Experts forecast it could fall towards 75, underscoring silver’s relative strength against gold.
Silver demand
The US, China, and India continue to dominate the global silver market, with India emerging as the second-largest consumer of physical silver, occasionally even overtaking the traditionally strong US market.
According to a report by Kitco, India’s silver imports almost doubled between August and September, despite prices hovering near record highs.
As of today, silver prices in India remain steady at ₹1,44,380 per kg and ₹1,443.80 per 10 grams. The metal is priced at ₹144.38 per gram and ₹14,438 per 100 grams, unchanged from the previous session’s close.
Can silver outperform gold?
Tata MF’s outlook suggests silver could continue to outperform gold in the medium term. The fund house points to several drivers:
Persistent supply deficit, now projected for the fifth consecutive year.
Industrial recovery in developed economies.
Favourable gold-to-silver ratio, indicating further upside.
Strong central bank buying of precious metals boosting overall sentiment.
However, experts caution that silver remains far more volatile than gold. Price swings can be sharp, making it more suitable as part of a diversified allocation rather than a core holding.
What should investors do?
Tata MF’s report recommends viewing silver as a medium- to long-term story (3–5 years), backed by industrial demand, renewable energy adoption, and global supply constraints. But it warns investors to remain mindful of short-term volatility and macroeconomic headwinds.
Financial planners suggest silver should be treated as a strategic allocation rather than a speculative bet. Key considerations include:
Allocation: Limit exposure to 5–10% of the overall portfolio, ideally within a precious metals allocation alongside gold.
Investment Routes: Instead of physical silver, which involves purity and storage concerns, investors can consider silver ETFs, mutual funds, or digital silver platforms.
Long-Term Outlook: Silver’s role in renewable energy and EVs gives it strong structural demand, but investors must be prepared for volatility.
Diversification: Pairing silver with gold can provide balance — gold as a crisis hedge, silver as a growth-driven play.
Outlook
As 2025 progresses, silver’s comeback story underscores its unique dual identity as both an industrial growth driver and a precious hedge. With supply deficits, rising industrial demand, and global monetary easing, silver appears well placed to shine brighter — even if volatility remains part of the journey.
While gold has dominated headlines for its record-breaking rally this year, silver has been quietly staging one of the most spectacular comebacks in decades. Starting 2025 at just $28.92 an ounce, silver surged past $46 by late September — a remarkable 61% gain in under nine months. For Indian investors, rupee depreciation has amplified these returns further, cementing silver’s position as one of the hottest assets of the year.
What’s driving the surge?
According to Tata Mutual Fund’s latest report, silver’s rally is being powered by a unique mix of industrial and precious metal demand. Unlike gold, which is largely a safe-haven asset, silver derives nearly 60% of its global demand from industrial uses, and this year several factors have aligned in its favour.
Industrial Demand Boom: Silver is critical in solar panels, electric vehicles, and electronics — all sectors experiencing rapid global expansion. With China’s economy showing signs of recovery, industrial consumption of silver is accelerating. Analysts note that the supply deficit in silver is widening, with demand consistently outpacing fresh supply.
US Fed Rate Cuts: The US Federal Reserve’s 25 basis point rate cut in September 2025 provided a strong tailwind, weakening the dollar and boosting precious metal prices. Expectations of another rate cut in October have added momentum. Historically, falling interest rates and a softening dollar make silver and gold more attractive.
Rupee Depreciation: Since India imports more than 92% of its silver, a weaker rupee makes the metal costlier domestically. While this increases inflationary pressures, it also magnifies returns for Indian investors compared to global peers.
Gold-Silver Ratio: A key metric for relative valuation, the gold-silver ratio, has slipped from 85 in early September to about 81. Experts forecast it could fall towards 75, underscoring silver’s relative strength against gold.
Silver demand
The US, China, and India continue to dominate the global silver market, with India emerging as the second-largest consumer of physical silver, occasionally even overtaking the traditionally strong US market.
According to a report by Kitco, India’s silver imports almost doubled between August and September, despite prices hovering near record highs.
As of today, silver prices in India remain steady at ₹1,44,380 per kg and ₹1,443.80 per 10 grams. The metal is priced at ₹144.38 per gram and ₹14,438 per 100 grams, unchanged from the previous session’s close.
Can silver outperform gold?
Tata MF’s outlook suggests silver could continue to outperform gold in the medium term. The fund house points to several drivers:
Persistent supply deficit, now projected for the fifth consecutive year.
Industrial recovery in developed economies.
Favourable gold-to-silver ratio, indicating further upside.
Strong central bank buying of precious metals boosting overall sentiment.
However, experts caution that silver remains far more volatile than gold. Price swings can be sharp, making it more suitable as part of a diversified allocation rather than a core holding.
What should investors do?
Tata MF’s report recommends viewing silver as a medium- to long-term story (3–5 years), backed by industrial demand, renewable energy adoption, and global supply constraints. But it warns investors to remain mindful of short-term volatility and macroeconomic headwinds.
Financial planners suggest silver should be treated as a strategic allocation rather than a speculative bet. Key considerations include:
Allocation: Limit exposure to 5–10% of the overall portfolio, ideally within a precious metals allocation alongside gold.
Investment Routes: Instead of physical silver, which involves purity and storage concerns, investors can consider silver ETFs, mutual funds, or digital silver platforms.
Long-Term Outlook: Silver’s role in renewable energy and EVs gives it strong structural demand, but investors must be prepared for volatility.
Diversification: Pairing silver with gold can provide balance — gold as a crisis hedge, silver as a growth-driven play.
Outlook
As 2025 progresses, silver’s comeback story underscores its unique dual identity as both an industrial growth driver and a precious hedge. With supply deficits, rising industrial demand, and global monetary easing, silver appears well placed to shine brighter — even if volatility remains part of the journey.