What is the story about?
Silver prices surged over 160% in 2025, with COMEX crossing $75 per ounce and domestic rates exceeding ₹2.3 lakh per kilogram, reflecting a structural shift in the global silver market, according to Motilal Oswal Financial Services Ltd.
The firm’s report, “Silver Unchained!!!”, attributes the rally to prolonged physical supply deficits, declining exchange inventories, policy-driven restrictions, and sustained industrial and investment demand, rather than short-term speculative positioning.
The 2025 surge marks the fifth consecutive year of physical deficit in the market, with mine supply unable to meet combined demand.
COMEX and Shanghai silver inventories showed persistent drawdowns throughout the year. COMEX registered stocks fell sharply, while Shanghai physical inventories also reached decade-low levels. This sustained shortage led to a widening premium of $5–$8 for Shanghai spot prices over COMEX futures, highlighting the stress on traditional arbitrage mechanisms.
China’s role in the global silver supply chain intensified market tightness. As one of the largest refiners and net importers of silver, Chinese inventories saw steady declines, and proposed export licensing requirements from January 2026 are expected to further restrict global metal flows.
Late in 2025, COMEX experienced a “vault drain crisis,” with over 60% of registered silver claimed for delivery within four trading days, underscoring the growing gap between outstanding futures contracts and physical availability.
The report notes that the disconnect between paper pricing and deliverable metal is now a key factor driving prices.
Navneet Damani, Head of Research – Commodities at Motilal Oswal, said, “Silver’s rally in 2025 is shaped by real metal scarcity. Physical deficits, policy-driven supply constraints, and concentrated inventories are increasingly dictating prices, marking a structural change in global silver trading.”
Manav Modi, Commodities Analyst at Motilal Oswal, added, “Persistent inventory drawdowns across key hubs and weakening arbitrage between Shanghai and COMEX have exposed the limited availability of deliverable silver. The sustained premium in physical markets reflects genuine supply tightness rather than temporary pricing inefficiencies.”
Motilal Oswal maintains a buy-on-dips approach, projecting silver to reach $77 on COMEX and ₹2.46 lakh domestically, with further revisions dependent on evolving supply-demand dynamics and policy developments.
The firm’s report, “Silver Unchained!!!”, attributes the rally to prolonged physical supply deficits, declining exchange inventories, policy-driven restrictions, and sustained industrial and investment demand, rather than short-term speculative positioning.
The 2025 surge marks the fifth consecutive year of physical deficit in the market, with mine supply unable to meet combined demand.
COMEX and Shanghai silver inventories showed persistent drawdowns throughout the year. COMEX registered stocks fell sharply, while Shanghai physical inventories also reached decade-low levels. This sustained shortage led to a widening premium of $5–$8 for Shanghai spot prices over COMEX futures, highlighting the stress on traditional arbitrage mechanisms.
China’s role in the global silver supply chain intensified market tightness. As one of the largest refiners and net importers of silver, Chinese inventories saw steady declines, and proposed export licensing requirements from January 2026 are expected to further restrict global metal flows.
Late in 2025, COMEX experienced a “vault drain crisis,” with over 60% of registered silver claimed for delivery within four trading days, underscoring the growing gap between outstanding futures contracts and physical availability.
The report notes that the disconnect between paper pricing and deliverable metal is now a key factor driving prices.
Navneet Damani, Head of Research – Commodities at Motilal Oswal, said, “Silver’s rally in 2025 is shaped by real metal scarcity. Physical deficits, policy-driven supply constraints, and concentrated inventories are increasingly dictating prices, marking a structural change in global silver trading.”
Manav Modi, Commodities Analyst at Motilal Oswal, added, “Persistent inventory drawdowns across key hubs and weakening arbitrage between Shanghai and COMEX have exposed the limited availability of deliverable silver. The sustained premium in physical markets reflects genuine supply tightness rather than temporary pricing inefficiencies.”
Motilal Oswal maintains a buy-on-dips approach, projecting silver to reach $77 on COMEX and ₹2.46 lakh domestically, with further revisions dependent on evolving supply-demand dynamics and policy developments.
