Silver has taken center stage in 2025, with prices in India surging to record highs, crossing Rs. 1,44,000 per kilogram on the MCX. This rally is not confined to Indian markets alone—global silver prices have also soared, with LBMA spot silver trading above $47 per ounce, marking a 14-year high. Yet, intriguingly, LBMA silver still trades below its all-time peak of nearly $50 set in 2011. What’s driving this surge? Is there more room for silver to run? And how can Indian investors participate in this rally for the long term?
Global silver performance: A bullish breakout
Silver prices have rallied over 65% year-to-date in 2025, outpacing most major asset classes. The breakout above $47 per ounce was a significant technical milestone, breaching a 14-year resistance level and signaling a potential long-term uptrend. The gold-silver ratio, which had hovered above 100:1 in recent years, has compressed to around 81:1, indicating silver’s relative outperformance.
In India, silver has mirrored this trend, driven by both global cues and domestic factors like currency depreciation and robust festival demand. The price surge has also been supported by increased inflows into silver ETFs and digital silver platforms.
Why is silver rallying?
Several structural and cyclical factors are fueling silver’s rally:
1. Industrial demand boom
Silver is a critical component in solar panels, electric vehicles (EVs), 5G infrastructure, and semiconductors. The solar photovoltaic (PV) sector alone consumed over 197 million ounces in 2024, and this is expected to rise further in 2025. EVs use up to twice as much silver as traditional vehicles, and with global EV adoption accelerating, demand is surging.
2. Supply deficit
The global silver market is in its fifth consecutive year of deficit. In 2025, the shortfall is projected at 149 million ounces. Mine production has stagnated due to declining ore grades and limited new discoveries, while recycling, though rising, cannot bridge the gap.
3. Monetary policy and inflation
Expectations of U.S. Federal Reserve rate cuts have weakened the dollar and lowered real yields, making non-yielding assets like silver more attractive. Central banks continue to expand their balance sheets, fueling inflationary concerns and boosting demand for precious metals as a hedge.
4. Geopolitical uncertainty
Ongoing conflicts in Eastern Europe and the Middle East, coupled with trade tensions and tariff uncertainties under the Trump administration, have increased silver’s appeal as a safe-haven asset.
5. Macroeconomic tailwinds
Silver’s rally is also being supported by:
- US Fed Policy: Rate cuts reduce the opportunity cost of holding silver.
- Gold’s Performance: Gold has rallied past $3,700/oz, and silver often follows gold’s lead.
- Geopolitical Risks: Conflicts and trade wars drive safe-haven demand.
- Central Bank Buying: While more focused on gold, central bank accumulation supports the broader precious metals complex.
Global demand-supply dynamics: A tight market
According to the Silver Institute, global silver demand is expected to remain stable at 1.2 billion ounces in 2025, with industrial demand hitting a record 700 million ounces. Key drivers include:
- Solar energy: Each panel uses 15–20 grams of silver.
- EVs: Use 25–50 grams per vehicle.
- Electronics: Smartphones, laptops, and AI servers are major consumers.
On the supply side, mine production is expected to rise modestly to 844 million ounces, while recycling may breach 200 million ounces for the first time since 2012. Yet, this still leaves a significant deficit, supporting higher prices.
Silver’s industrial demand is broad-based and growing. The below mentioned are the key industrial areas where silver is used the most.
Electronics: Circuit boards, RFID chips, and 5G tech
Solar Panels: Fastest-growing segment, especially in China and India.
Electric Vehicles: Battery management systems, inverters, and sensors.
Healthcare: Antimicrobial coatings, surgical tools, and wound dressings.
Emerging Tech: AI servers, flexible electronics, and hydrogen fuel cells.
These sectors are not only expanding but also increasingly reliant on silver’s unique properties, making substitution difficult.
Silver Shines as a Strategic Investment Asset
Silver is increasingly gaining traction as a strategic investment asset, driven by its dual role as both a precious and industrial metal. Traditionally overshadowed by gold, silver is now emerging as a preferred choice for investors seeking diversification, inflation protection, and exposure to the green energy transition.
One of the key drivers of investment demand is silver’s affordability compared to gold, making it accessible to a broader base of retail investors. With global economic uncertainties, rising inflation, and expectations of interest rate cuts, silver is being viewed as a hedge against currency debasement and market volatility.
Moreover, this industrial underpinning distinguishes silver from gold and enhances its long-term investment appeal.
In India, investors can access silver through physical bullion, silver ETFs, digital silver platforms, and futures contracts on MCX. The introduction of silver mutual funds and SIP options has further simplified long-term participation.
How to invest in silver for the long term in India
Indian investors have multiple avenues to gain exposure to silver:
Physical silver
Silver can be invested in the form of Coins, bars, and jewelry. The key advantages are tangible assets and high liquidity. Meanwhlie, storage cost, purity concerns and making charges are the disadvantage of this type of investment.
Silver ETFs
Investors can explore Silver ETFs as well. Silver based ETFs offer high liquidity, SEBI-regulated and nil storage costs while it requires demat account and possibility of tracking error.
Digital silver
There are digital platforms Like MMTC-PAMP, Paytm, PhonePe offering digital investment in silver. Benefits of this type of investment is, it can buy in small quantities and easy to sell. However, there are platform risks and limited regulation.
Silver mutual funds
Silver can also invest through Mutual fund via SIP as well. These are ideal for retail invests seeking diversification of their investment.
Silver futures (MCX)
MCX, the largest commodity exchange in India offering silver investments through its derivatives. Futures and Options in silver for different contract specification are available for hedging, arbitrage and speculative trading in this platform. There are mini and micro contracts which are suitable for retail investors while mega contracts are suitable for HNI and Corporate for their hedging needs. These platforms are high risk due to leverage and volatility.
Silver mining stocks
There are options to invests in silver through silver mining stocks as well. Return from these stocks are tied to company performance and global silver prices.
Future of silver. Will LBMA silver break its all-time high?
Silver likely to retest and even surpass its 2011 high of $50 per ounce. There are expectations that silver stock levels in the key markets likely to be depleted in the coming months if investment demand continues at the current pace. With structural deficits, rising industrial use, and speculative interest, a breakout above $50 is increasingly plausible.
However, risks remain. A sudden shift in Fed policy, a stronger dollar, or a slowdown in industrial demand could temper the rally. Still, the fundamentals suggest that silver’s bull run has more legs.
LBMA silver vs Indian silver: Correlation and divergence
Indian silver prices are closely linked to LBMA benchmarks, as India imports over 60% of its silver. However, local factors such as import duties, currency fluctuations, and festive demand can cause temporary divergence.
For instance, while LBMA silver is trading around $46, Indian prices have surged past ₹1.44 lakh/kg, partly due to the weakening rupee and strong domestic demand. Despite this, the long-term correlation remains strong, with Indian prices typically tracking global trends.
Looking ahead: A silver-lined opportunity
Silver’s rally in 2025 is not just a speculative spike—it’s underpinned by strong industrial demand, persistent supply deficits, and macroeconomic tailwinds. While volatility is inherent, the long-term outlook remains bullish.
For Indian investors, silver offers a compelling diversification tool, especially amid inflationary pressures and currency depreciation. Whether through ETFs, digital silver, or physical holdings, now may be an opportune time to add a touch of silver to your portfolio.
