Gold’s poor cousin crowned 2025’s richest! Silver ETFs just doubled money and the rally isn’t over yet
The rally has left traditional investments far behind. Gold ETFs have managed only 63% returns this year, while the Sensex and Nifty have crawled forward with meagre 6-7% gains each.
Silver prices hit a record high of $53.60 on Tuesday in international markets, while MCX Silver December futures touched a peak of Rs 162,700 this week. The physical market is witnessing unprecedented tightness, with spot prices trading at a premium amid shortage reports. ETFs are commanding even higher prices as commodity traders acting as market makers grapple with depleted inventory and diminishing confidence in the immediate replenishment of LBMA-certified silver bars.
“Unlike previous speculative spikes (1980, 2011), the 2025 surge is fundamentally underpinned by irreversible, material demand from the green energy transition and expanding technology sectors (EVs, Solar, 5G),” Motilal Oswal analysts said. “This fundamental support suggests that breaking $50 is not merely a technical event but a necessary repricing mechanism to balance global demand with constrained supply, thereby establishing a new, higher baseline for the metal going forward.”
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Motilal Oswal projects consolidation around the $50-55 mark over the next few months, with potential peaks reaching $75 per ounce by 2026 and a sustained movement toward $77 per ounce in 2027 on COMEX. Assuming the average USDINR stays around 90, the brokerage said silver can touch Rs 2,40,000 by the end of 2026 and Rs 2,46,000 on the domestic front.
Bank of America has raised its silver target to $65 an ounce with an average of $56.25, even as it anticipates an 11% decline in demand next year. The bank cited a continued supply shortfall, with the Silver Institute projecting the metal is on track to record its fifth consecutive year of structural market deficit.
The silver market is forecasted to remain in deficit for the fifth consecutive year in 2025, with a projected shortfall of approximately 118 million ounces. This structural imbalance underscores the metal’s critical role in the green economy.
Silver’s industrial demand is projected to rise approximately 3% in 2025, reaching a record high driven by green economy applications. With uses spanning solar panels and batteries, silver is emerging as a strategic metal as the global renewable push drives fresh demand.
The supply constraints are structural. Approximately 70% of silver comes as a by-product of zinc, lead, copper, or gold mining, meaning silver output depends on the economics of those metals rather than silver prices themselves. Unless base metal prices rise significantly, silver output elasticity remains limited. Analysts say a meaningful supply-demand balance may not occur before 2028, even with higher prices.
“While momentum has carried prices higher and could accelerate beyond the critical $50/oz resistance level, current technical indicators suggest a potential near-term pullback,” Nomura said. “These dips 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.”
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Even celebrity investors are jumping on the silver bandwagon. Personal finance author and ‘Rich Dad Poor Dad’ fame Robert Kiyosaki has been aggressively bullish on silver, calling it and cryptocurrency Ethereum “hot, hot, hot” in a recent social media post. Kiyosaki predicted that silver could soon hit $75 per ounce, after recently crossing the $50 mark.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)