Silver price correction of 15-20% possible but $85-90 likely over next 2 years: Vandana Bharti

Vandana Bharti, head of commodity research at SMC Global Securities, said on Wednesday that silver had not witnessed a rally of the current magnitude since 1979, when prices had surged from about $6 to $30 an ounce, a rise of roughly 374 per cent in that year. She said while a short-term correction of 15-20 per cent is on the cards, her long-term view on silver stayed positive on several structural reasons.

In an interview to Business Today, Bharti said silver has climbed around 130 per cent so far in 2025, and the rally showed little signs of exhaustion. Unlike previous cycles, Bharti said the current uptrend is not being driven only by retail investors, derivatives traders or miners, but also by governments and countries increasing their exposure to the metal.

According to her, this structural shift explained why buyers were stepping in aggressively even on modest declines of 2 per cent to 5 per cent, as investors do not want to miss the opportunity to accumulate silver, either in physical form or through paper instruments.

Bharti said that after such a sharp rise, trading in silver should be approached with greater caution, noting that prices on the Multi Commodity Exchange had risen, partly aided by rupee depreciation. However, she maintained that the broader structure for silver remained strong, as the metal had consolidated for nearly a decade in a $13–$30 range before breaking out decisively.

She added that supply-side constraints are also supporting prices, as existing mines were ageing and depleted, while new mines would take several years to come on stream. With fresh demand emerging and new supply still some years away, Bharti said physical scarcity in the market was evident.

While she expected a correction after the steep rally, Bharti said any likely pullback to be limited to about 10 per cent to 15 per cent, unlike the 40 per cent to 60 per cent corrections seen in earlier cycles.

She said a deeper correction beyond 15 per cent to 20 per cent appeared unlikely in the current environment, given the overwhelmingly bullish positioning in both physical and paper markets, as well as the presence of premiums and backwardation in silver.

Bharti said silver did not appear close to a sustained correction, though some moderation in prices could emerge from March onwards, as the current month contract remained heavily skewed towards long positions.