Silver prices soar to Rs 1.64 lakh/kg ahead of Dhanteras, Diwali — will the rally lose steam soon? 

Silver prices in India surged to unprecedented levels on Thursday (October 16), as investors and industrial buyers scrambled for the precious metal amid tight global supply and a rapidly evolving energy transition. On the Multi Commodity Exchange (MCX), December 2025 silver futures hit an all-time high of Rs 1,64,660 per kilogram, up 1.33% from the previous close. Futures for March and May 2026 also hit record highs of Rs 1,64,958 and Rs 1,66,338 per kg, respectively — underscoring the strength and breadth of the rally.

In the physical markets, prices have already breached historic thresholds. On October 15, silver crossed Rs 1.89 lakh per kg in Delhi, Kolkata, and Mumbai, and even Rs 2 lakh in Chennai, reflecting a staggering Rs 6,000 jump in just two days between October 13 and 14.

Silver outburst

Silver has quietly outperformed every major asset class in 2025 — even outshining India’s stock market. Prices have surged nearly 57% in just six months, climbing from around Rs 1,00,000 per kilogram in April to Rs 1,57,000 in October, while the Nifty 50 index has remained largely stagnant. Globally, spot silver traded at $53.07 per ounce, after touching a record $53.60 earlier this week. The rise has been driven by both industrial demand and speculative momentum, as supply tightness continues to grip global markets.

Silver’s new role

Silver’s rally this year — nearly 90% year-to-date — is being powered by industrial usage and structural scarcity. Unlike gold, whose price is dictated by investor and central bank demand, silver’s fundamentals are rooted in its industrial applications. Nearly 60% of global silver demand now comes from sectors such as solar panels, electric vehicles (EVs), semiconductors, and 5G networks — all crucial for the clean-energy transition.

“Silver has hit a record high near $53 an ounce, and this surge is because of changing fundamentals,” said Navy Vijay Ramavat, Managing Director of Indira Securities. “Mining costs are rising, discoveries are limited, and even central banks such as Saudi Arabia have begun investing in silver ETFs — a historic move. Together with geopolitical tensions and the prospect of global rate cuts, silver is now both an industrial and safe-haven asset.”

Ramavat, however, cautioned that investors should avoid chasing highs. “It’s better to accumulate gradually through ETFs or on dips of 4–10%. After such a sharp move, the next three months could bring consolidation or mild correction.”

Domestic push

In India, silver’s rally has been amplified by a weaker rupee, short covering, and heavy festive demand. With Diwali around the corner, jewellery purchases and trader stocking have intensified. However, experts warn that prices may cool post-festive season.

According to Motilal Oswal Financial Services, silver’s long-term outlook remains bullish, with potential to hit Rs 2,46,000 per kilogram by 2027, though short-term consolidation between $50–55 per ounce could temper its momentum.

While some analysts earlier attributed the rally to speculative activity, many now acknowledge its industrial foundation. “Today’s rally is fuelled by genuine industrial demand, not pure speculation,” analysts noted. “Yet, silver remains volatile. Renewable energy, EVs, and electronics are long-term growth drivers, but sharp corrections often follow speculative peaks. Investors should limit exposure to around 10% of their portfolio and avoid buying at euphoria.”

Buy in silence, not in hype

Financial mentor Kirang Gandhi pointed out that physical silver availability has nearly vanished from major exchanges. “There’s almost no liquidity for spot silver delivery at the London Bullion Market Association,” he said. “When even paying a premium can’t get you an ounce, it’s not a metal shortage — it’s a mindset shortage. Everyone wants to buy when it shines, but smart investors accumulate when it’s silent.”

Current outlook

Analysts agree that silver’s long-term fundamentals remain robust thanks to its expanding industrial base and constrained supply. However, the market’s history of sharp rallies followed by steep corrections demands discipline and patience from investors.

CA Nitin Kaushik recently posted: “Silver is the regret machine — it silently outperforms flashy IPOs and tech stocks, but investors only notice it after the rally. The real wealth is built by those who accumulate before the noise, not during it.”