Silver Price Prediction 2026: Is Silver the new Gold?
For decades, silver played second fiddle to gold. But 2025 changed the narrative completely. Silver delivered one of the strongest commodity rallies in modern history, driven by a powerful mix of macro shifts, supply stress, and exploding industrial demand. In many ways, the silver price rally feels less like a spike and more like a structural reset.
Silver Returns in 2025: A Record-Breaking Year
Silver emerged as one of the top-performing assets globally in 2025:
International Spot Silver: Surged 137% YTD, trading around $68.68 per ounce.
Indian Markets (MCX): The MCX Silver rate rallied 144% YTD, now trading near ₹2,15,419 per kg.
This marked silver’s strongest annual performance since 1982, decisively outperforming gold returns, which rose about 64% over the same period.
What Drove the Silver Rally in 2025? (Macro Triggers)
1. US Fed Rate Cuts Expectations of US Federal Reserve rate cuts in 2026 played a major role. Lower interest rates reduce the opportunity cost of holding non-yielding assets, significantly improving the investment appeal of silver. 2. Cooling US Economy & Soft Dollar With US unemployment rising to 4.6% and a weakening US Dollar Index (DXY), investors pivoted toward precious metals as a safe haven. Historically, a weaker dollar is a major tailwind for commodity prices. 3. Sovereign and Institutional Adoption Silver is no longer just for retail:
Russia allocated funds toward silver reserves.
Saudi Arabia’s central bank acquired exposure via Silver ETFs.
Silver Investment in India: The Supply Crunch
In India, the Silver ETF AUM nearly doubled in Q3FY26. However, by the end of 2025, several Asset Management Companies (AMCs) including HDFC Silver ETF, ICICI Pru Silver ETF, and Axis Silver ETF temporarily halted fresh inflows into Silver ETF Fund of Funds (FoF). This was due to a physical silver shortage in the local market, leading to domestic silver prices trading at a significant premium to global silver rates.
The Structural Supply Deficit: Why Supply Can't Catch Up
At the heart of this rally lies a deep structural supply problem. Unlike other metals, silver production is inelastic. Silver as a By-Product Over 70% of global silver production comes as a by-product of mining copper, lead, and zinc. Even if the silver price per kg doubles, miners cannot simply "turn on the tap" without increasing their base metal production. Drying Inventories
2025 Deficit: The fifth consecutive year of a silver supply-demand gap.
Vault Stocks:London vault stocks (LBMA) are down ~40% since 2022.
Industrial Buffers: Current stocks now cover only 30–45 days of demand.
The Demand Surge: Who Is Consuming Silver?
Today, 59% of silver demand is industrial, and that share is skyrocketing.
Solar Energy (Photovoltaics):Solar silver demand is the biggest driver, consuming nearly 243 million ounces annually. Every solar panel locks silver away for decades.
AI & 5G Infrastructure: Silver’s unmatched conductivity makes it critical for AI data centers, semiconductors, and 5G networks.
Electric Vehicles (EVs): An EV requires nearly double the silver of a petrol car for its battery management systems and sensors.
Want to see the technical charts and a detailed 2026 price breakdown? Watch my latest video:
Conclusion The Silver rally of 2025 was a correction of a decade-long mispricing. With rising industrial use in AI and Green Energy and a rigid supply chain, silver is no longer just "poor man’s gold" it is the strategic metal of the future.
