Silver seems to be confidently breaking out of the shadow of its more illustrious sibling in 2025. Its rally this year has been much stronger than gold, making it a mainstream investment choice. The increased demand, coupled with a worldwide supply shortage, begs the question: Is it silver’s moment to shine?
Silver’s Record Rally in 2025
Silver started the year around the $29 per ounce mark. By late December, spot prices surged to $83 per ounce for the first time, resulting in a yearly gain of over 180% at its peak. In the same period, gold gained 70%, making silver’s staggering rise all the more impressive.
In the Multi Commodity Exchange (MCX), March silver futures reached a historic high of ₹2.62 lakh per kilogram in December 2025. Rewinding to January 1, 2025, the price of silver on the MCX was ₹85,913, meaning it has returned roughly 172% year-to-date.
But what brought this remarkable rise?
Why Silver Surged
There were several forces at play that explained silver’s meteoric rise in 2025.
- Industrial demand
Demand for silver, especially from the electronics and energy sectors, has surged significantly. Silver is used extensively in solar photovoltaics, electric vehicles, data centres, semiconductors, and advanced electronics. Considering that all of these sectors are shaping the future of technology, the demand for silver is only expected to increase.
- Structural supply crunch
While the demand for silver is touching record-high levels, on the supply side, there have been consecutive shortages for many years. In India, there was a 42% decline in silver imports during the initial eight months of 2025, right at the start of the festive period, where demand peaks.
Globally, too, the silver market faced its fifth straight annual deficit, with demand touching 34 million tonnes while supply was limited to 29 million tonnes. London, once India’s primary source, saw its inventory plunge to its lowest level in years.
- Investment appetite
The Assets Under Management (AUM) growth in silver ETF has been immense, surging more than 125% from June 2024 to May 2025. During the same period, gold ETF AUM grew nearly 82%.
The growth in silver ETFs is down to it having safe haven qualities, high industrial demand, and also offering a lower entry point to investors compared to gold.
- Macro tailwinds
Major geopolitical events, including the ongoing war in Ukraine and the tariff wars, positioned silver as a safe investment bet. Expectations of US interest rate cuts and a weaker dollar have also boosted interest in silver. Why it has the edge over gold currently is due to its uses in emerging industries.
But there are two sides to every coin.
Risks and Volatility
Silver’s spectacular rise has not come without turbulence. There has been heightened volatility in late 2025.
The Chicago Mercantile Exchange raised margin requirements on silver futures to reduce speculative trading and lower the chances of extreme price moves. There’s also been some profit-booking in late December, dropping from $80 per ounce to below $75 in one day.
It highlights the high-beta nature of silver, where upsides can be explosive, but so can the corrections.
Conclusion
Continued industrial demand and shortage in supply will continue to elevate silver’s position. However, continued volatility could see price corrections. It is expected that silver will consolidate its gains and test the upper levels, with patches of volatility. However, investors should be cautious while investing.
