In a remarkable turn of events, silver prices on the Multi Commodity Exchange (MCX) have reached an all-time high of ₹1.06 lakh per kilogram as of June 6, 2025. This surge signifies a 22% increase in silver’s value since the beginning of the year, closely trailing gold’s impressive 27% rise during the same period. The previous day, silver had already set a new benchmark by surpassing ₹1.04 lakh per kg, indicating a consistent upward trajectory. This bullish trend in silver prices is attributed to a combination of factors, including increased institutional demand, supply constraints, and prevailing geopolitical uncertainties.
Factors Driving the Surge in Silver Prices
1. Institutional Demand and Supply Constraints
Analysts suggest that heightened institutional demand for silver, coupled with supply shortages, is a primary driver behind the escalating prices. The industrial applications of silver, especially in sectors like solar energy and electric vehicles, have significantly increased its demand. As industries pivot towards sustainable technologies, the need for silver in photovoltaic cells and battery production has surged, creating a robust market for the metal.
2. Geopolitical Uncertainties
Ongoing geopolitical tensions, such as the Russia-Ukraine conflict, have led investors to seek safe-haven assets like precious metals. This shift in investment strategy has bolstered the demand for silver, contributing to its price hike. In times of uncertainty, investors often turn to tangible assets, and silver, with its historical role as a store of value, has become increasingly attractive.
3. Comparative Performance with Gold
After a period of underperformance relative to gold, silver has started to attract investors looking for alternative precious metal investments. The narrowing gap between gold and silver’s performance has made silver a more appealing option for portfolio diversification. As gold prices soar, many investors are exploring silver as a cost-effective alternative, further driving its demand.
Expert Opinions on Silver’s Future Trajectory
Manav Modi, Senior Analyst at Motilal Oswal Financial Services
Modi emphasizes the importance of upcoming U.S. economic indicators, such as non-farm payroll data and unemployment rates, in determining the future direction of silver prices. He notes that these metrics could influence investor sentiment and, consequently, the demand for precious metals. A strong economic report could lead to a shift in investment strategies, impacting silver’s appeal.
Jatin Trivedi, Analyst at LKP Securities
Trivedi maintains a bullish outlook on silver, citing a 60% increase in its value over the past two years. He attributes this growth to persistent global market volatility and robust demand from the solar and electric vehicle industries. Trivedi predicts that silver prices could range between ₹1.10 lakh and ₹1.20 lakh per kg in the near future, recommending a strategy of buying during price dips to capitalize on potential gains.
Kalantari, Analyst at Mehta Equities
Kalantari identifies support levels for silver at ₹1,03,560–₹1,02,750 and resistance levels at ₹1,05,850–₹1,06,750. These technical indicators suggest potential price movements and can guide investors in making informed decisions. Understanding these levels is crucial for investors looking to navigate the volatile silver market effectively.
Investment Considerations: Is Now the Right Time?
Pros
Strong Industrial Demand: The increasing use of silver in renewable energy and electric vehicles supports long-term demand, making it a potentially lucrative investment.
Safe-Haven Asset: In times of geopolitical and economic uncertainty, silver serves as a reliable store of value, appealing to risk-averse investors.
Potential for Further Growth: Expert analyses suggest that silver prices may continue to rise, offering opportunities for capital appreciation.
Cons
Market Volatility: Precious metal prices can be volatile, and sudden market shifts may impact returns, posing risks for short-term investors.
Economic Indicators: Upcoming economic data releases, particularly from the U.S., could influence silver’s price trajectory, adding an element of unpredictability.
Investment Horizon: Short-term investors may face challenges due to price fluctuations; a long-term perspective is advisable for those looking to invest in silver.
Conclusion
The unprecedented rise in silver prices to ₹1.06 lakh per kg on MCX reflects a confluence of increased industrial demand, supply constraints, and geopolitical uncertainties. While expert analyses indicate the potential for further growth, investors should consider market volatility and economic indicators when making investment decisions. A strategic approach, focusing on long-term gains and buying during price corrections, may be beneficial for those looking to invest in silver. As the market evolves, staying informed and adaptable will be key to navigating the complexities of silver investment.
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