Silver has delivered exceptional returns this year, supported by rising industrial consumption, limited supply, strong inflows into exchange-traded funds, and a favourable interest rate environment in the United States. Expectations of further monetary easing by the US Federal Reserve have added momentum to the rally.
Globally, silver prices have climbed about 158% so far this year. In the domestic market, spot silver has surged by nearly ₹1,45,000 per kilogram, translating into a gain of almost 170% during the same period. The rally has been largely driven by demand from fast-growing sectors such as electric vehicles, solar power, semiconductors and data centres, all of which rely heavily on silver. Supply, however, has struggled to keep pace. According to data from the Silver Institute, worldwide silver demand exceeded production for the fourth straight year in 2024, creating a structural deficit of roughly 148.9 million ounces.
Monetary policy has also played a key role. The US Federal Reserve has already cut interest rates by a cumulative 0.75 percentage points, with markets expecting at least two more reductions next year. Additionally, investor behaviour has shifted as gold prices have jumped 72% this year, making the metal less accessible. This has triggered a fear of missing out, pushing investors toward silver. On December 26, silver futures climbed to around $79.70 per troy ounce, with analysts increasingly eyeing the $100 level ahead.
