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Below the Quote on Gold and Silver by Kaynat Chainwala, AVP Commodity Research, Kotak Securities

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. Investment demand remains robust as silver-backed ETFs continue to attract buying interest, with global holdings on pace for a sixth consecutive week of inflows. 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, reinforcing the bullish narrative and potentially sustaining elevated prices in the near term. 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.

Spot silver’s rally, with YTD gains of over 120%, has outpaced gold, which has risen around 65% so far this year. The 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. Additionally, silver’s inclusion on the US “critical minerals” list underscores strategic supply risks and the potential for higher import costs or policy-driven disruptions.