Silver Prices Poised for 46-Year High, Up 120% This Year: Can Rally Reach ₹250,000?

Silver is shining in the commodities market this year, with prices skyrocketing 120% year-to-date. This surge propelled silver past ₹200,000 in the Indian market for the first time on Friday, positioning it for its strongest annual performance in 46 years, since 1979.

Analysts believe this rally is far from over, forecasting prices could climb to ₹240,000-₹250,000 in the next year, representing another 25% increase. This prediction is based on real supply shortages, rather than temporary market speculation.

**Factors Driving Silver's Price Increase**

According to Harshal Dasani, Business Head at INVAsset PMS, silver's impressive performance signals a fundamental shift in the market, driven by actual scarcity and increased demand.

Axis Direct notes that global mine production has not increased despite higher prices, remaining stagnant at roughly 810 million ounces. This level is effectively unchanged, or even lower, than five years ago. The firm points out that 70-80% of silver is mined as a byproduct of other metals like lead, zinc, and copper. This limits supply elasticity, as miners can't simply increase silver production without negatively impacting the markets for those primary metals.

Refinitiv data indicates that silver supply deficits are expected to continue through 2026, with an estimated shortage of 112 million ounces.

Axis Direct also emphasizes that industrial demand is a crucial element of the bullish outlook for silver, particularly from the photovoltaic (PV) sector, which has significantly altered the demand dynamics.