In the current year, silver has performed brilliantly and has seen a tremendous increase of 120 percent. Due to this rise, the price of silver in the domestic market crossed Rs 200,000 for the first time on Friday. The special thing is that silver has broken the 46 year old record in terms of speed. For the first time since 1979, such a rise has been seen in the prices of silver. However, this is not likely to be the end of this golden shine of silver. Analysts expect its price to reach a target of ₹240,000-250,000 next year – another 25% upside – due to material supply constraints. Let us also tell you what the experts have to say about this.
What are the reasons for the rise in silver prices?
Harshal Dasani, Business Head, INVAsset PMS, said in a Mint report that rising silver prices indicate a structural revaluation in the market, which is due to physical shortage and increasing demand. Global mining production has not kept up with higher prices and has stagnated at about 810 million ounces, which is about the same or less than the level of five years ago. About 70-80 percent of silver is obtained as a by-product of lead, zinc and copper. According to Refinitiv data, the silver supply shortfall is expected to last until 2026, estimated at about 112 million ounces. The brokerage firm believes that industrial demand remains the main basis of this upward forecast. The solar photovoltaic (PV) sector has fundamentally changed the nature of demand.
Increase in industrial demand
According to the firm, industrial demand has increased. This has happened especially due to the promotion of green energy. There has been a doubling of demand for silver from the solar energy sector in the last four years. The demand which was 94.4 million ounces in the year 2020 has increased to 243.7 million ounces in 2024. Solar energy alone will account for about 21 percent of the total demand in 2024. Additionally, the market is currently grappling with logistics imbalances caused by trade policy uncertainty. Throughout the year, COMEX futures have been trading at a consistent premium to the London spot price.
What is the trend in the international market?
This arbitrage opportunity has aggressively taken the metal out of London, the world’s main liquidity centre, and sent it into US reserves, effectively reducing the global float. Axis Direct said that silver reserves in Comex are increasing. Even on technical charts, silver has decisively broken the decade-long low. The brokerage firm believes a sustained monthly close above $67 could trigger a multi-year uptrend with a target of $76-80. However, the firm believes that there may be consolidation near resistance around $65, but overall there are bullish signs in the long term.
Will silver cross Rs 2.50 lakh?
Axis Direct believes that in the domestic market, if silver price falls to the range of Rs 1,70,000-1,78,000, it can be used to buy silver in a phasewise manner, with a target of around Rs 2,40,000 for 2026. On the other hand, Dasani said that the outlook for silver remains strong in the future. Due to physical shortage, industrial demand and renewed interest in investment, Dasani said the price of the metal is not only increasing but it is also being revalued. Due to which the rise may continue in the year 2026 and may reach Rs 2.50 lakh.