Last Updated:
Indian silver demand sparks global shortage, with MMTC-Pamp exhausting stock and London markets in panic.
India’s Diwali Silver Frenzy Sends Shockwaves Through London
India’s unprecedented silver buying spree is sending ripple effects worldwide, with London grappling with severe shortages, according to a report of Bloomberg News. This festival season Indian investors are rushing to buy silver-based jewelleries or silver ETFs, leading to a crunch of physical silver. The demand has also amplified after several fin influencers such as Sarthak Ahuja promoted silver’s 100-to-1 ratio to gold.
The Bloomberg News report added that India’s largest precious metals refinery, MMTC-Pamp, exhausted silver stock for the first time ever in the history. Silver shortage has prompted bidding wars among dealers.
The demand is so high that premiums in India surged above $5 an ounce, far higher than usual.
Global Ripple Effect
Shortage of silver is clearly perceptible at the global level, coincided with China’s week-long holiday leading to cutting supply, surge in silver ETFs and US-bound shipments to pre-empt possible tariffs, according to Bloomberg News.
London silver market saw extreme stress and liquidity has dried up with borrowing rates soared to 200 per cent annualized, the Bloomberg report added.
Debasement trade, a belief that US dollar is losing its value at the global level, leads to shore up other form of assets like gold and silver by central banks and institutions.
Silver prices hit $54 an ounce, then plunged 6–7% after the initial surge. This is the second time silver is up $50 an ounce in the history. Earlier, it had gone $50 an ounce in 1970.
The Bloomberg report added that in the long-term perspective, silver demand is outstripping supply by 678 million ounces due to solar industry.
Stoppage Of Lump-Sum In Silver By MFs
Several prominent mutual fund houses such as Kotak MF, UTI and SBI MF in India are forced to halt new silver fund subscriptions.
“Domestic silver is currently trading at a significant premium compared to international prices due to acute scarcity in India’s physical silver market,” Kotak Mutual Fund’s press released said while temporarily suspending Lumpsum/Switch-in Subscriptions in Kotak Silver ETF Fund of Fund.
The premium has increased from approximately 0.5% in early September 2025 to 5.7% as of 9th October 2025, it added.
This is the most severe silver squeeze since the Hunt brothers attempted to corner the market in the 1980s, the Bloomberg News report added.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
October 19, 2025, 16:46 IST
Read More