Silver prices are on fire. On MCX, the most-active March contract for silver surged by Rs 8,356, hitting a record high of Rs 2,06,111 per kilogram. This marks an increase of nearly 4.2% from the contract’s Tuesday close of Rs 1,97,755 per kg.
Heavy trading volume was also observed for silver’s May 2026 contract, which rose 4.12% to touch a lifetime high of Rs 2,08,914 per kilogram.
Here’s why silver prices are soaring:
1. Silver outperforms gold
Recently, silver has been outshining gold in the precious metals segment, with Comex futures surpassing the $66 per ounce mark for the first time. The March 2026 contract appreciated by 5.25%, reaching an all-time high of $66.65 per ounce.
Market veteran Ajay Bagga described silver’s performance as “gold on steroids,” noting that it reflects a catch-up after a prolonged period of underperformance relative to gold. Historically, silver tends to outperform gold during major precious metals bull markets.
2. Rising industrial and investment demand
Bagga explained that the other triggers helping demand include industrial requirement, investment inflows, and supply inelasticity. “Add the hi-tech/industrial demand and the surge in investment demand, and you have the recipe for a 110%+ rise in silver prices this year,” he said.
Kaynat Chainwala, AVP Commodity Research at Kotak Securities, added that silver’s rally is fueled by tight physical supply, rising safe-haven demand, strong inflows into silver-backed ETFs, and growing expectations of US Federal Reserve rate cuts.
3. Silver overtakes crude oil
Silver prices have also outperformed crude oil. “Crossing the $65 threshold marks the dawn of a new era for silver. As silver overtakes crude oil for the first time in 40 years, the market is sending a clear message: the future belongs to the tangible, the critical, and the rare,” said Aamir Makda, Commodity & Currency Analyst at Choice Broking.
He noted that rising US unemployment, currently at 4.6%, could prompt Fed rate cuts in 2026, further boosting silver demand.
“In a rare historical event, silver is now trading higher than a barrel of WTI crude oil ($65/oz vs. roughly $56/barrel). This inversion hasn’t been seen since the late 1970s and early 1980s, signaling that this industrial metal is becoming as strategically important as energy,” Makda added.
4. Supply deficits and currency impact
Silver is in its fifth consecutive year of supply deficit. What’s further added fuel to the fire is the continued weakness in the rupee’s value against the dollar. This has led to acceleration in the price of the dollar-denominated commodities.