Last year, buyers on Dhanteras purchased a 10-gram silver coin for about Rs 1,100. Fast forward to Dhanteras 2025, and the price for the same coin has surged to nearly Rs 1,950, marking a significant 98% year-on-year increase. This surge in silver prices, outpacing the rise in gold prices, is largely attributed to a global rally. Various factors, such as industrial demand, using silver as a hedge during conflicts, and increased festive buying, have contributed to the upward trend. However, the looming question remains—will silver prices witness a decline in the near future?
On October 17, silver prices soared above Rs 1.89 lakh per kg in major Indian cities like Delhi, Kolkata, and Mumbai, reaching even Rs 2 lakh in Chennai, Hyderabad, and Kerala, with a remarkable Rs 6,000 surge between October 13 and 14 alone.
The astounding price surge in the Indian silver market is predominantly a recent development, with a substantial portion occurring over the span of the last four months.
A global silver shortage has emerged, depleting existing stocks while mining struggles to keep pace.
Prior to Dhanteras and the wedding season in India, some traders have reportedly paused new orders. Jitendra Kumar, a jeweler based in Mumbai who owns a jewelry showroom in Bandra, noted that “customers purchasing silver for weddings are doing so, while others are holding off in anticipation of a price correction.”
REASONS BEHIND THE SILVER PRICE SURGE
Earlier in the year, optimistic sentiment in the futures market, particularly on the Multi Commodity Exchange (MCX), led to contracts touching Rs 1,25,000 per kg, further propelling prices upwards. The current spot price for 999 purity silver in India stands at Rs 1,89,000 per kg.
Throughout the past year, silver has served as a safeguard against inflation, with investors turning to it to safeguard their wealth amidst escalating prices. Festive demand in the final quarter of the year has also played a part, as silver is commonly exchanged and gifted during festivities.
Furthermore, there is a substantial industrial demand for silver in electric vehicles (EVs), solar panels, and semiconductor production.
Geopolitical tensions have also influenced the situation, with conflicts in regions like the Middle East and Ukraine, as well as heightened activity in the Indian subcontinent, prompting investors to turn to precious metals like silver as a safe haven.
LIKELY DIRECTION OF SILVER PRICES
Experts suggest that silver prices may experience a decrease in the short term, particularly as festive buying is expected to diminish post-Diwali, allowing the market to stabilize.
“The current volatility is anticipated to subside following the waning festive demand. Post-Diwali, we could see the market returning to normalcy as arbitrage returns diminish and premiums compress. I foresee this beginning from next week onwards,” noted Renisha Chainani, the