Synopsis: Silver prices have gone over Rs 2,00,000 per kg after a powerful 2025 rally, which was mainly supported by supply deficits, industrial demand and monetary tailwinds. But can it sustain its momentum?
Silver reaching new ground with its dramatic move in December 2025 to break the Rs 2,00,000 per kilogram barrier is a classic example of a metal signing off sharply from consolidation and heading to uncharted territory.
It has been a phenomenal metal performance in 2025, silver doubling its value (131 percent), whereas the price of gold only rose by approximately 80 percent, thus, silver has been the best-performing metal and is attractive to investors looking to expose themselves to the current market dynamics.
However, the most important question at stake here is whether one can expect this splendid rally to continue with the silver price that is approaching the resistance level after a few sessions of profit-taking? The main argument for silver series power is hidden in three interconnected pillars that haven’t shown any signs of weakness.
Reasons
First of all, global silver markets are undergoing a deficit for the fifth year in a row, this time it is a consequence of the rapid growth of the industrial demand for such things as solar panels, electric vehicles, semiconductors, and 5G applications. This shortage of resources is not a fleeting one, but rather a reflection of the world’s move towards a clean energy infrastructure in which silver is a key element.
Additionally, China has decided to impose new limits on its silver exports. The most notable change is that, starting from January 2026, companies will need a special license to export silver. The policy will be effective until 2027 at least. The timing of this announcement is rather unfortunate for the world silver market, which is quite fragile at the moment, and the consequence of such a restriction from China, the world’s major metals trader, would inevitably lead to a further tightening of the international market and a decrease in the availability of silver in foreign markets.
The timing of the policy is quite surprising, as global physical demand for silver is still very strong, and India is a good example of that. In September–October 2025, India imported more than 2,600 tonnes of silver, and in October, the spike was really sharp, as 1,715 tonnes were imported only in that month, indicating that buying interest was quite strong and continuous.
Given that supply is likely to be constrained because of China’s export licensing rules while demand remains unchanged, these developments could be a driver of silver demand and prices in the medium term. This would be even more so if alternative supply sources were not able to compensate for the shortage. This will further aid the demand for silver in the market.
China’s exports hit a record high of 660 tonnes in October 2025, while local stocks were at their lowest levels over the last ten years; thus, it was a clear indication of the strong global demand. Such restrictions from China and high trade might lead to more demand for silver, which shall increase its price in the future.
Second, monetary tailwinds are still there to support the precious metals complex. The rate-cut cycle of the US Federal Reserve is leading to the creation of an environment where silver, as a non-yielding asset, is becoming an attractive alternative. The market expects one more rate cut in 2026, which means that interest rate support for precious metals could last until a new year.
The third case is the stunning relative to gold silver repricing that is well illustrated by the gold-silver ratio going down to below 70 from the value of around 105. Such a separation is a clear indication that silver is not just a precious metal anymore but a heavily used industrial commodity. The 113.4 million ounces year-to-date global silver exchange-traded funds inflow is a strong signal that institutional investors consider this price reformation as one of permanence and validity.
The Gold-Silver Ratio is simply how many ounces of silver it takes to buy one ounce of gold, calculated by dividing the gold price by the silver price (e.g., 80:1 means gold costs 80 times more than silver by weight.
Who are the top producers of Silver?
The largest silver producers in the world are led by Mexico, which produced about 6,300 metric tons of silver in FY24. China follows with around 3,300 metric tons, and Peru is close behind at nearly 3,100 metric tons. Other significant producers include Bolivia and Poland, each producing about 1,300 metric tons during the same period.
Chile and Russia both produced around 1,200 metric tons in FY24, while the United States contributed about 1,100 metric tons. Australia and Kazakhstan each produced roughly 1,000 metric tons. Together, these countries make up the majority of the global silver supply, with much of the silver obtained as a byproduct of mining copper, gold, lead, and zinc.
Axis Securities anticipates silver to grow by another 20 percent to Rs 2,40,000 per kilogram in 2026. According to Axis Securities, a monthly price above $67 could be indicative of a long-term upward trend opening with the possibility of a bullish move to around $76-$80. Though there is a possibility that the prices may halt or consolidate at around $65, the overall trend is positive.
In October 2025, Motilal Oswal published a report stating that it is optimistic about silver over the long term, which is mainly caused by a continual global supply deficit and a robust industrial demand.
The brokerage is forecasting that the Indian silver prices will hit Rs 2.4 lakh per kg by 2026, and the international prices will be around $70-75 per ounce in two years. It points out the expanding industrial use of silver, particularly in solar, electronics, and EVs, coupling that with the increase in ETF inflows and a depreciating rupee, which, without a doubt, can uplift the domestic price levels even more.
In conclusion, Silver has crossed the Rs 2,00,000 per kg mark on the back of strong structural and macro tailwinds, but sustaining these levels will depend on how prices behave around key resistance zones. While supply deficits, industrial demand and supportive monetary conditions remain intact, near-term consolidation or volatility cannot be ruled out. The trend will stay constructive as long as major support levels hold, but confirmation of sustained momentum will require stability at higher levels rather than a sharp extension.
Written by Satyajeet Mukherjee
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