Silver Price Surge: Silver prices created history on Friday by crossing Rs 2 lakh per kg on the MCX. This sharp rise came as global markets reacted positively to signals from the US Federal Reserve. Investors now expect easier money conditions to continue into 2026.
Axis Mutual Fund warned that silver now looks expensive in the short term. It pointed to weak physical buying in some markets, money flowing out of silver ETFs, and profit booking by traders. Still the fund house did not turn negative. It said the overall trend for silver remains strong even if prices fall for a while.
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Silver Price Surge: Why is Silver still Important?
Axis Securities said silver still has room to move higher. It advised investors to buy slowly if prices fall to Rs 1.7–1.78 lakh, reported Business Today. The firm expects silver to reach Rs 2.4 lakh in 2026. According to technical charts silver has ended a very long slow phase. It broke out of what analysts call a massive “Rounding Bottom breakout formation” that lasted from 2011 to 2025 on monthly charts.
Long-term signals also look healthy. Both the 20-month and 60-month EMAs are moving upward. Prices trade well above these levels which usually shows strong early-stage momentum. Axis Securities also highlighted a big market signal. “A critical development in late 2024 and throughout 2025 has been the collapse of the Gold/Silver Ratio (Historically serving as a barometer for risk appetite, the ratio has compressed significantly, falling from highs near 105 to current levels below 70,” Axis Securities said.
This change shows silver has started to move on its own and not just follow gold. Supply also remains tight. Silver mostly comes as a by-product of lead, zinc, and copper mining. 2025 marks the fifth year in a row when demand stayed higher than supply.
Risks still Remain despite Demands
Axis Mutual Fund also listed risks that could hurt prices. A stronger US dollar, higher real interest rates, calmer global politics, falling copper prices, or investors shifting money to energy or farm goods could slow silver. Central banks also prefer gold over silver so official buying stays limited. Industries may also try to replace silver with cheaper metals if prices rise too much.
Even with these risks silver demand stays strong. More than 50% of silver use comes from industry. Solar panels, electric vehicle batteries, and semiconductors need large amounts of silver. Solar power alone used 94.4 Moz in 2020. This jumped to 243.7 Moz in 2024 and now takes 21% of total silver demand.
Gold continues to support the metals market. “However, in the near term, we have a positive bias on gold, supported by safe haven flows given the backdrop of global uncertainty,” the note said.
At the same time analysts warned investors to stay careful. “As we enter 2026, many of the drivers that fuelled gold’s rally in 2025 may continue to provide support, however investors need to be mindful of potential headwinds that may temper the momentum. Higher real yields, a stronger US dollar, higher global growth, reduced inflationary pressures, and hawkish US policy stance may erode demand. Additionally, profit-taking, weaker ETF inflows, commodity rotation into industrial metals and easing geopolitical risks could also weigh on the prices.”
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Top 5 Performing Funds 6-Month Returns
- Tata Silver ETF – 85.72%
- ICICI Prudential Silver ETF – 82.37%
- DSP Silver ETF – 82.27%
- Aditya Birla Sun Life Silver ETF – 82.14%
- Kotak Silver ETF – 82.08%
1-Year Returns
- Tata Silver ETF – 107.03%
- UTI Silver ETF – 106.51%
- HDFC Silver ETF – 104.67%
- ICICI Prudential Silver ETF – 103.50%
- DSP Silver ETF – 103.34%
3-Year Returns
- HDFC Silver ETF FoF (Direct Plan) – 40.24% CAGR
- ICICI Prudential Silver ETF FoF (Direct Plan) – 40.24% CAGR
- Aditya Birla Sun Life Silver ETF FoF (Direct Plan) – 40.23% CAGR
- Nippon India Silver ETF FoF (Direct Plan) – 40.19% CAGR
- Axis Silver ETF – 39.91% CAGR
