Silver Rates Prediction 2026: Silver prices have staged an extraordinary rally in 2025, delivering more than 130% return. It has raised the key question for investors and consumers alike: Can the momentum
sustain into 2026? After breaching the psychologically important Rs 2 lakh per kg level on the MCX and touching record highs in global markets, analysts say the medium-term outlook for silver remains constructive, though bouts of volatility are likely.
In the domestic spot market, silver in Mumbai was quoted at Rs 2,08,000 per kg on December 17, reflecting the sharp rise seen over the year. Internationally, silver prices have surged 132 per cent in 2025 to around $65 an ounce as of December 17, compared with nearly $28 an ounce at the beginning of the year.
What is driving silver’s rally?
According to market experts, the rally has been fuelled by a rare convergence of supply-side constraints and strong investment and industrial demand.
Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said, “Silver extended its remarkable rally, breaking above the $66 per ounce level for the first time on record, driven by a combination of tight physical supply conditions, rising safe-haven demand, strong inflows into silver-backed ETFs, and growing expectations of US Federal Reserve rate cuts.”
She added that investment demand continues to remain robust. “Silver-backed ETFs continue to attract buying interest, with global holdings on pace for a sixth consecutive week of inflows,” she said.
Supply concerns have further amplified the bullish sentiment. “Momentum has been further amplified by reports that China plans to restrict silver exports from 2026, a development that could disrupt a key supply source and intensify pressure on the global market. With Chinese silver inventories already at their lowest levels in a decade, any export curbs risk worsening the physical squeeze,” Chainwala noted.
On Indian exchanges, the rally has been even sharper. “On the MCX, silver jumped above Rs. 205,000 per 10 grams, pushing year-to-date gains to about 134%, further buoyed by rupee depreciation,” she said, adding that silver has significantly outperformed gold this year.
Silver outshines gold
While gold prices have risen around 65 per cent so far in 2025, spot silver has delivered gains of over 120 per cent, driven by factors beyond safe-haven demand.
Chainwala pointed out that the metal’s strength reflects “a historic squeeze driven by tight supply, rising lease rates, and brighter demand prospects linked to silver’s indispensable role in the global green energy transition”. She also highlighted that silver’s inclusion on the US ‘critical minerals’ list underscores strategic supply risks and the potential for higher import costs or policy-driven disruptions.
Will prices cool before rising again?
Some analysts caution that the pace of the rally suggests near-term overheating, even as the broader trend remains upward.
Justin Khoo, Senior Market Analyst – APAC at VT Market, said, “Silver’s surge beyond Rs 2.05 lakh per kg and above $65 an ounce, it is entering a phase where risk management becomes as important as conviction.”
He added silver would probably break the all-time high again before retracing and moving up again, reflecting the strength of underlying momentum.
Khoo believes the rally has been driven by “a powerful mix of global rate cuts, rising liquidity, a softer dollar and structurally strong industrial demand”, but warned that prices appear technically overbought in the near term. “This should not be mistaken for a breakdown in the trend. Any retracement would likely be a healthy reset that improves the risk-reward for fresh participation,” he said.
Industrial demand reshapes the silver market
Unlike gold, whose demand in 2025 has been largely driven by safe-haven buying and lower opportunity costs, silver has benefited from both investment flows and strong industrial consumption, particularly from the green energy transition.
Axis Securities, in its latest report on silver, said, “Demand from the Solar Photovoltaic (PV) sector has more than doubled in just four years, from 94.4 Moz in 2020 to 243.7 Moz in 2024. Solar alone accounted for nearly 21% of total demand in 2024, fundamentally altering the metal’s usage profile.”
The supply-demand imbalance is expected to persist. Axis Securities noted that the silver market has remained in deficit since 2021, with a cumulative shortfall of nearly 700 million ounces between 2021 and 2025. According to Refinitiv estimates cited in the report, the market is likely to remain in deficit in 2026 as well, with a projected shortfall of over 100 million ounces.
Highlighting recent market stress, Axis Securities said, “Fears of impending US import tariffs have triggered a flight of physical metal toward US markets, sparking a historic ‘squeeze’ in the futures market. Throughout the year, COMEX futures have persistently traded at a premium to London spot prices.”
Outlook for 2026
Taken together, analysts say silver’s long-term fundamentals — tight supply, expanding industrial use and supportive monetary conditions — continue to favour higher prices into 2026. However, after such a steep rally, periods of consolidation or correction cannot be ruled out.
Experts say that for investors, silver’s structural story remains intact, but navigating 2026 may require patience and disciplined risk management as the metal adjusts to its new, elevated price regime.
