White metal may still give up to 50% return in a year

Synopsis

Silver prices have seen an 18% drop in the past two weeks, presenting a buying opportunity for investors. Analysts predict a potential 50% surge by next year, with prices consolidating before moving towards $75 per ounce. Supply constraints and increasing industrial demand are key drivers for this optimistic outlook.

Mumbai: Investors looking for winners outside equities could consider buying silver afresh following the 18% drop in prices in the past two weeks. Despite the recent weakness, analysts said there is still more steam for the white metal to return as much as 50% by next year.

"We believe silver prices will consolidate between $50-55 an ounce over the next few months, with some profit booking from recent highs on cards and eventually could move towards $75 by end of 2026, with domestic prices moving to ₹240,000 per kg assuming dollar stays around 90," says Manav Modi, research analyst, Motilal Oswal Financial.

International silver prices fell 10.9%, from a peak of $54.45 per ounce on October 16 to $48.59 now, while domestic prices fell 18% from ₹182,500 per kg on October 14 to ₹149,500.

Easing safe-haven demand amid improving risk appetite and progress in global trade talks has reduced investor interest in precious metals, resulting in a pullback in silver prices. The correction follows a steep rally earlier this month, prompting profit-booking by traders.

Over the last year, silver has returned 44% in dollar terms and 55.72% in rupee terms.

Agencies

What Price Drop? Silver prices could consolidate between $50 & $55/oz, given supply constraints & industrial demand

Analysts said supply constraints and rising industrial demand from green energy and electric vehicles continue to support silver's long-term outlook. "Supply growth for silver has been limited, and recent years have shown a consistent supply deficit. In 2025, the projected deficit is 118 million ounces, making a strong case for rising prices," says Anil Ghelani, head - Passive Investments and Products, DSP Mutual Fund.

Ghelani points out that silver usage will be on the rise as the world increasingly shifts towards green energy and electric vehicles. Analysts also believe supply constraints, such as stagnant mining and limited recycling, have tightened the market, making the outlook for the white metal bullish in the medium term. After the recent spike in prices, wealth managers believe investors should add on dips but limit exposure to 3–7% of their total portfolio.

“Do not make big lump-sum purchases and over-allocate after this sharp rally, as historically silver is a volatile asset and there are risks of sharp short-term corrections,” says Viral Bhatt, founder, Money Mantra.

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