Silver prices are up 59.3 per cent in 2025, hitting nearly $44.55 an ounce (oz) in international markets and Rs 137,040 per kilogram (kg) in India on Thursday.
It’s the best return the metal has given since 2016.
Silver has outperformed gold (price up around 49 per cent at Rs 1,12,895 per 10 gram as of Thursday, September 25) in 2025.
Silver gave such a return back in 2020 when prices rose 44 per cent to Rs 67,383 per kg from the previous year, according to data.
Gold prices that year increased 27.9 per cent to Rs 50,001 per 10 gram.
Silver has been “redefined” as an investment option, analysts said.
Weak market demand and a production surplus from 2010 to 2020 resulted in subdued prices.
The landscape changed after 2021, triggered by rising industrial demand for the metal.
By 2024, industrial demand hit a record high of 680.5 million ounces (Moz), according to a note by Nomura.
The trend led to a total demand of 1,164.1 Moz against a total supply of just 1,015.1 Moz, creating a market deficit of 148.9 Moz.
Analysts said the structural shift was driven by three sectors — renewable energy, electric vehicles, and electronics — as China aggressively adopted high-silver-content N-type solar cells.
Sustained demand for silver has led to above-ground inventories declining sharply: From 22-months of supply in December 2020 to just 13 months by December 2023, according to Nomura.
The current gold-to-silver ratio of 85 is another reason for silver’s appeal.
The ratio indicates how many ounces of silver are needed to buy an ounce of gold.
A higher ratio means gold is more expensive, while a lower one suggests silver may be undervalued and could be a better investment.
Nomura estimated that in 2025 demand for silver will be 1,148.3 Moz against a supply of 1,030.6 Moz, leading to a deficit of 117.6 Moz.
“Industry projections now suggest a potential exhaustion of known silver reserves by 2050 if this consumption pattern continues,” said Gareth Nicholson, chief investment officer and head of managed investments at Nomura, in a recent note.
“With limited upside potential in gold prices near term, we view silver as increasingly attractive, particularly given its dual role as both an industrial metal and a precious metal hedge against economic uncertainty,” he said.
While silver prices could rise beyond the critical $50/oz resistance level, technical indicators suggest a near-term pullback.
These dips, Nomura said, could present attractive entry points for investors looking to capitalise on silver's strong fundamental outlook and its unprecedented 45-year cup-and-handle formation.
Mensur Pocinci, an analyst who tracks commodities at Julius Baer, expects prices to hit $52-$58 levels.
“The next visible target on the charts for silver stands at Rs 1,50,000/kg, up 12 per cent from the current levels.
"Silver’s rally is not only about safe-haven demand — it is being redefined as an industrial powerhouse,” said Jahol Prajapati, a research analyst with SAMCO Securities.
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