Metals are on fire and silver is leading the charge, hitting yet another record high above the $80/oz mark. Silver has been outperforming gold and so far in 2025, the key precious metal as well as important industrial raw material, silver gained nearly 181% on a year-to-date basis. On MCX, silver rose by 6% to hit a all time high of Rs 2,54,174/kg.
This year has been a milestone year for silver as it has shattered record highs.
3 reasons powering silver’s surge to record highs
Here are three reasons why prices rose to new record high marks.
#1 Increasing bets of rate cuts and a soft dollar index
Silver prices have hit record highs on growing expectations of a rate cut by the US Federal Reserve. Currently, markets project two rate cuts by the Fed in 2026. The growing bets are largely on the back of cooling labour market conditions in the US, supported by expectations of further monetary easing by the Fed. Precious metals like silver tend to perform well in lower interest rate environments.
The dollar index, which measures the value of the dollar against a basket of six major currencies, has also been near its lowest levels since October. A weak dollar makes precious metals like silver less expensive for holders of other currencies, aiding demand.
#2 Strong industrial demand
Industrial demand for silver has remained heavy. With China’s silver export restrictions set to kick in from January 1, 2026, and the US designation of silver as a critical metal, demand has been increasing as it is used in many critical applications with limited substitutes available. Strong industrial demand from solar manufacturing units has added to the pressure.
#3 Supply constraints
Silver prices have been gaining on the back of persistent supply disruptions. In 2025, India imported 6,000 metric tonnes of silver, which is further driving prices. “Silver has overtaken Microsoft to become the fifth most valuable asset in the world, behind only gold, Nvidia, Apple and Alphabet (Google), at $3.6 trillion in value,” Ajay Bagga said earlier in December. The tightening global supply has added to the upward pressure.
However, just a few hours after hitting record highs, silver pulled back to $77/oz, largely attributed to profit booking by investors. Further, optimism around Ukrainian peace discussions helped soften prices.
While short-term volatility may persist, analysts have added that with increasing industrial demand and rising expectations of a rate cut, silver may even climb towards the $100/oz mark in 2026.
