Kolkata: Silver rallied ₹10,000 Monday to ₹1.74 lakh per kg, which market participants said was driven by a supply squeeze, softer dollar globally, rising expectations of a rate cut in the US and the rupee’s recent weakness against the greenback.
The metal was on Friday trading at ₹1.64 lakh per kg after recovering from the ₹1.49 lakh levels it had dropped to in the last one month.
A rally similar to that on Monday was observed last on October 13, when the metal went up ₹10,850 per kg to ₹1.75 lakh. With 3% goods & services tax, consumers had to pay ₹1,79,220 for a kg of the white metal on Monday.
Silver price has doubled in the past 12 months, rising faster than gold, which has gained 60%.
“It is anticipated that the US economy would continue to slow down until 2026 and that the Federal Reserve will probably drop interest rates, which is attracting some investors back,” said Renisha Chainani, research head at Augmont Gold.
While the supply shortage continues, driving prices, demand is strong for silver as an investment. According to Metals Focus, a global independent precious metals research consultancy firm, investment demand for silver for calendar 2025 is projected to be 1,751 tonnes, up 350 tonnes compared with 2024.
Global silver price is expected to increase from around $58 per troy ounce now to $60-65 in 2026, said Chirag Sheth, principal consultant for India at Metals Focus. “There is still headroom for silver to appreciate.”
Experts said the deficit in global silver supply is likely to continue for some time. While the total silver production stands at 26,000 tonnes, there is a shortage of 6,000-7,500 tonnes this year, one of the largest in recent decades.
Global demand for silver has been outstripping supply since 2020, according to the Washington-based Silver Institute. Most silver mining happens as a by-product of gold, lead or zinc mining. Therefore, unless mining of these metals goes up, supply of silver will remain under constraint.
Silver ends in the positive territory 60% of the time in December, said Chainani. It had its biggest December returns in 1997 and 2020, with gains of roughly 17% over the month. This seasonal tailwind, and tight supply conditions, are expected to intensify the current price trend with a December target of $60-62 per troy ounce, with firm support at $53.
