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After months of anticipation, silver futures on the Multi Commodity Exchange (MCX) surged past the psychological Rs 2,00,000 mark on Friday, December 12, touching a lifetime high of Rs 2,01,615 for the March contract.
The milestone has further sparked interest among investors and traders alike, prompting questions around the sustainability of the rally and the road ahead for the white metal.
A historic run in 2025
Silver’s performance in 2025 has been nothing short of remarkable. According to Axis Direct, “Silver extended its golden run in 2025 after delivering more than 20% return in 2024. Prices posted their highest yearly gain of more than 100% since 1979.”
The metal broke out of a multi-year consolidation phase, forming a large Rounding Bottom breakout pattern that dates back to 2011–2013.
The structural breakout came as silver surged past neckline resistance at $50 per ounce and hit a new all-time high of $64, with analysts noting a clear long-term bullish trend formation.
What drove silver’s 2025 rally?
Several fundamental and macroeconomic triggers have contributed to the meteoric rise in silver prices this year. One of the key shifts highlighted by Axis Direct is the decoupling of silver from gold:
“The silver market is undergoing a historic repricing event, marked by the decoupling from its traditional correlation with gold.”
They added that the rally was “driven by the convergence of industrial scarcity and monetary tailwinds,” reflecting structural supply-demand imbalances in the silver market.
Another major contributor was the persistent supply deficit, which has remained in place since 2021. Axis Direct highlighted: “The silver market has remained in deficit since 2021, with a cumulative shortfall of ~700 Moz over the 2021–2025 period.”
According to Refinitiv data cited by the brokerage, the market is expected to remain in deficit in 2026 as well, with the shortfall forecast to exceed 100 Moz.
On the industrial demand side, the rise of green technologies played a pivotal role.
“The photovoltaic (PV) sector has fundamentally altered the demand curve,” noted Axis Direct. Demand from the solar sector has more than doubled from 94.4 Moz in 2020 to 243.7 Moz in 2024, and now accounts for over 21% of total demand.
Axis Direct also flagged logistical constraints and tariff risks in the US as amplifying supply-side pressures: “Fears of impending US import tariffs have triggered a flight of physical metal towards US markets, sparking a historic ‘squeeze’ in the futures market.”
Need for caution?
Despite the strong uptrend, some market voices are urging caution. Justin Khoo, Senior Market Analyst at VT Markets, remarked: “Silver has climbed to an all-time high above $63.00 per ounce, underscoring the strength of the current bullish momentum, but its rapid ascent also calls for caution.”
Khoo noted that the metal is “technically overstretched”, adding that entering fresh positions now carries an “unfavourable risk-reward profile”. He advised waiting for a healthy retracement before considering new trades, although he maintained that the broader outlook remains supportive.
With Rs 2 lakh mark achieved, what’s next?
Commenting on the Indian futures market, Ponmudi R, CEO of Enrich Money, stated:
“MCX Silver settled lower around Rs 1,92,600/kg, correcting sharply after touching lifetime highs above Rs 2,00,000 earlier in the weekend.”
He added that the near-term momentum is cooling, even though the broader bullish framework remains intact. The 20- and 50-EMA cluster between Rs 1,66,000 and Rs 1,71,000 continues to offer structural support.
“Immediate resistance is at Rs 1,95,000–Rs 2,00,000; reclaiming this zone could reignite a move towards Rs 2,05,000+,” he noted, while warning that a break below Rs 1,90,000 could lead to unwinding towards Rs 1,85,000–Rs 1,80,000.
However, the long-term outlook remains positive, supported by structural fundamentals. Axis Direct observed:
“A sustained monthly close above $67 could trigger a multi-year uptrend targeting $76–$80.”
In the Indian market, they foresee that “any correction down to the Rs 1,70,000–Rs 1,78,000 range can be used for staggered accumulation, with the target of around Rs 2,40,000 for 2026.”
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
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