Money Mantra: India’s Silver Surge

IN THE BUSTLING bullion markets of Mumbai and Delhi, silver prices have ignited a dazzling rally, soaring over 25 per cent in the past six months to hit record highs above ₹1,00,000 per kilogram as of January 2026. What was once the overlooked sibling of gold is now stealing the spotlight, drawing investors, jewellers, and industrialists into a frenzy. This isn’t just a fleeting sparkle—it’s a confluence of global economics, domestic demand, and India’s unique position as the world’s second-largest silver consumer.

Fuelling the fire are macroeconomic tailwinds. A weakening US dollar and persistent inflation have propelled safe-haven assets worldwide, with silver benefitting from its dual role as both a pre­cious metal and an industrial powerhouse. Globally, spot prices have climbed past $32 per ounce, but in India, import duties and a depreci­ating rupee have amplified the gains. Solar panel production, electric vehicles, and electronics—sectors exploding under India’s green energy push—account for nearly 50 per cent of domestic consump­tion, as per World Silver Survey 2025data.

Domestic factors add rocket fuel. Festive seasons like Deepawali and wedding booms have spiked jewellery demand, while the shift to lighter, silver-heavy designs appeals to millennials. Investor senti­ment is buoyant too: MCX silver futures have seen trading volumes double year-on-year, with retail participation surging via apps like Zerodha and Groww. Foreign portfolio inflows into commodities, eyeing rupee stability post-RBI’s hawkish stance, have poured in ₹5,000 crore since October.

Yet, this rally isn’t without shadows. Sky-high prices could crimp industrial users like photovoltaic manufacturers, potentially slowing India’s 500GW renewable target by 2030. Supply constraints loom— global mine output stagnates at 800 million ounces annually—while recycling rates hover at 20 per cent. Experts warn of volatility: a US Fed rate cut or China slowdown could trigger pullbacks.

For investors, the play is tactical. Buy on dips below ₹95,000/kg, hedge with options, advise analysts. Long-term, silver’s 15 per cent CAGR projection through 2030 underscores its allure in diversified portfolios, especially as India eyes self-reliance in critical minerals.