Silver prices experienced a significant increase of Rs 7,457 per kg on Wednesday, rising to Rs 1,84,448 from Rs 1,78,893 the previous day, driven by strong demand from the green energy sector and financial investors engaging with exchange-traded funds (ETFs), according to data from the Indian Bullion and Jewellers Association of India.
On the Multi Commodity Exchange (MCX), silver for March delivery reached a peak of Rs 1,91,800 per kg, gaining Rs 2,082 in the initial half of trading on Wednesday. The commodity surged to record highs, with COMEX prices hitting $62 and MCX climbing to Rs 1,92,000, fueled by a combination of macroeconomic factors and physical market dynamics.
A constriction in global inventories, coupled with decade-low stockpiles in China and heightened borrowing costs in London, has intensified the supply squeeze, propelling silver prices upward. The industrial demand for silver in sectors like solar energy, electric vehicles (EVs), and electronics continues to exceed mining output, contributing to a persistent structural deficit.
In addition to industrial demands, financial investors have increasingly turned to silver through ETFs, spurred by rising demand in the face of supply shortages. Jigar Trivedi, Senior Research Analyst at Reliance Securities, noted that silver prices exceeded $61 an ounce, as market expectations of a 25 basis points interest rate cut by the Federal Reserve coincided with significant supply constraints. He indicated that a more hawkish Fed or a sudden increase in mining output could temper gains; however, current conditions of physical scarcity and robust institutional demand are key drivers of the price rally, with the possibility of MCX Silver for March reaching Rs 2 lakh per kg.
Ajay Kumar, Director of Kedia Commodities, pointed out that silver prices have doubled since 2025, driven by several critical factors, including the U.S. decision to include silver on its list of critical metals. He remarked that industrial demand, particularly from data centers, has surged, exacerbating the supply deficit and further elevating silver prices.
Demand for silver jewelry has also been on the rise, according to Suvankar Sen, Managing Director and CEO of Senco Gold & Diamonds. Silver is increasingly viewed as an alternative to expensive gold jewelry and is favored for gifting purposes. The ongoing short supply of physical silver is contributing to rising prices, with significant inflows into silver ETFs anticipated to create choppy markets but with an upward trend expected in the coming year.
Ponmudi R, CEO of Enrich Money, stated that the recent silver rally is now supported by real consumption demand rather than mere speculation. He explained that the weakening of the rupee against the dollar provides automatic price support for import-linked metals like silver, causing it to gain value faster than gold.
Published on December 10, 2025.
