Dhanteras 2025: How far can silver prices rise amid historic rally

Silver prices have staged an extraordinary rally ahead of Dhanteras 2025, outpacing even gold’s gains, as a severe global supply squeeze triggers historic premiums in physical markets.

According to a report by Ventura Securities, international spot silver recently touched $53 per ounce, surpassing levels last seen during the Hunt brothers’ short squeeze of 1980. In India, IBJA spot rates hit ₹1.78 lakh per kilogram, significantly higher than MCX futures at ₹1.62 lakh per kg, highlighting acute physical scarcity and widening spot-futures backwardation.

Ventura attributes the rally to a sharp liquidity crunch in major trading hubs like London, where one-month lease rates briefly surged above 30%, and overnight borrowing costs crossed 100%, forcing short sellers to pay steep premiums to roll contracts.

Festive demand intensifies tightness in India

The surge coincides with India’s festive buying season, amplifying pressure on supply chains. Silver imports have nearly doubled compared to last year, with both physical purchases and ETF inflows rising.

Retail prices in Mumbai’s Zaveri Bazaar have reportedly crossed ₹2 lakh per kilogram.

In response to the squeeze, major mutual fund houses including SBI, Kotak, and UTI have temporarily halted subscriptions to silver ETF fund-of-funds to protect investors from extreme spot premiums.

Why silver is outperforming

Silver’s strength stems from a rare dual driver: industrial demand + safe-haven interest.

Industrial applications account for nearly 60% of global silver demand, particularly from solar energy, electronics, and defense.

Projected industrial demand is expected to grow 5–6% annually through 2027, driven by photovoltaics and electric vehicles.

Meanwhile, geopolitical tensions, trade disputes, and a weakening U.S. dollar are boosting silver’s appeal as a hedge.

“Global uncertainties continue to push investors toward safe-haven assets. With gold trading near record highs, many are shifting to silver as a more affordable alternative,” said Shahzad Madon, CEO of TCG Asset Management.

Shoyal Kumar, Founder & CEO of Tredo, added that “silver may continue to outperform gold this Diwali until the demand-supply imbalance begins to normalise.”

Outlook

Ventura sees immediate resistance for MCX silver near ₹1.65 lakh per kg, with potential upside to ₹1.80 lakh per kg and ₹2.10 per kg lakh if prices sustain momentum. Support levels are at ₹1.57 lakh per kg and ₹1.46 lakh per kg.

On COMEX, silver faces resistance at $55 an ounce, with targets at $65 an ounce and $70 an ounce, while support stands around $48 an ounce.

Market watchers expect continued volatility but sustained strength unless supply chains ease significantly. While equities may benefit from policy support such as GST cuts and potential trade deals, analysts say bullions are unlikely to lose momentum in the near term.