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Silver has gained 98% in one year, 133% in two years, 182% in three years and 419% over the last decade, MCX data shows.
Both global and domestic forces are propelling silver to unprecedented levels.
Silver prices in India continued their rally this week, climbing to a fresh all-time high of Rs 1,84,727 per kg on the Multi Commodity Exchange (MCX) on Wednesday (December 3). The March contract alone surged by Rs 3,126, extending the metal’s unprecedented upward momentum. In just the past month, silver spot prices on MCX have jumped nearly 20%, rising from Rs 1,48,717 to Rs 1,77,886. Silver has gained 98% in one year, 133% in two years, 182% in three years and 419% over the last decade, MCX data shows.
What’s Fueling The Record-Breaking Silver Rally?
Both global and domestic forces are propelling silver to unprecedented levels. A major driver behind the surge is the expectation that the US Federal Reserve may begin cutting interest rates soon. Lower rates typically boost demand for precious metals. At the same time, global silver inventories remain extremely tight, with stockpiles showing little sign of easing.
Adding to this is the growing industrial demand for silver, especially from sectors like solar power, electronics and green technology. As these industries expand rapidly, silver is increasingly seen not just as a safe-haven asset but as a crucial industrial metal.
In recent weeks, large volumes of silver have been absorbed by bullion-backed exchange-traded funds (ETFs), pulling significant quantities out of the physical market. As ETF inflows rise, less silver remains available for industrial and investment demand, deepening the supply crunch.
A recent supply squeeze in London- the world’s biggest silver trading hub- amplified global price pressures, sending rates sharply higher across key markets. Even though new shipments have arrived, borrowing costs for silver remain elevated, indicating continued tightness.
Domestically, the sharp depreciation of the rupee against US dollar has added an additional layer of price pressure. Since silver is globally priced in dollars, a weaker rupee automatically translates to higher domestic rates on MCX.
What Should Investors Do Now?
With silver trading at lifetime highs, here’s what investors can do:
1. Investors sitting on strong gains may choose to book profits on a portion of their holdings while retaining some exposure to benefit from further upside if the supply tightness persists.
2. Entering the market at record levels can be risky. A gradual, phased investment strategy helps reduce the chances of buying at a peak and allows investors to average costs more effectively.
3. Given the sharp rally, market corrections are likely. Declines of 3–8% may offer reasonable entry points. Staggered buying can help manage volatility.
4. Silver prices may fluctuate ahead of important global economic indicators, particularly US labour market data and the upcoming Federal Reserve meeting on December 10. Geopolitical developments, including any movement on peace negotiations related to the Russia–Ukraine conflict, may also influence prices.
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December 04, 2025, 17:26 IST
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