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Below the Perspective on Silver by Ms. Riya Singh - Research Analyst, Commodities and Currency, Emkay Global Financial Services

“Silver has surged sharply as investors rotate out of the dollar into tangible assets, reflecting mounting apprehension over U.S. fiscal stability and the autonomy of the Federal Reserve. Supply constraints have intensified, with robust shipments to the United States amid concerns of potential import tariffs draining London inventories to multi-year lows. In India, the world's largest consumer of silver, prices are trading at a steep premium of up to 10% - 15% over global benchmarks, driven by robust investment and festival-related demand, prompting physically backed ETFs to halt new subscriptions. Industrial and investment demand continues to outpace supply.

Over the past four years, global silver consumption has exceeded production, eroding the surplus accumulated over the preceding five years. In 2025, supply remains constrained, as roughly 70% of silver is mined as a by-product of other metals, limiting the pace at which output can respond to higher prices. Demand from renewable energy, electronics, and high-tech sectors further intensifies the structural deficit. India’s import requirements underscore this imbalance: in the first eight months of 2025, silver imports fell 42% to 3,302 tons, while ETF inflows and other investment channels surged, absorbing the surplus brought in during 2024. Consequently, manufacturers are struggling to produce silverware, coins, and bars, while festive purchases ahead of Diwali have pushed premiums higher. Investor reluctance to liquidate existing holdings has tightened scrap availability, further straining the market.

Additional pressure stems from U.S. policy developments. Following silver’s inclusion in a draft critical minerals list in September, shipments to the United States have accelerated, raising concerns over potential tariffs under Section 232 investigations covering silver, platinum, and palladium. This uncertainty, combined with historically low London inventories, has amplified price volatility. Benchmark London prices have approached record levels, nearing $53.95 per ounce, prompting some traders to transport silver bars via air freight, a method typically reserved for gold, to exploit the London premium. Silver’s smaller market size and lower liquidity relative to gold magnify these price movements.

Absent a stabilizing central bank bid, even modest reductions in investment inflows could trigger sharp corrections, unwinding the London tightness that has underpinned the recent rally. Silver is likely to maintain its upward trajectory toward 165,000–185,000–194,639 levels domestically, while on the international front, it could test $56–$58–$59.89. Key support is seen around 153195 - 150,000 locally and $51.85 -$50 globally.”

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