Silver exchange-traded funds (ETFs) witnessed a powerful rally on Wednesday, climbing sharply as they tracked an explosive surge in silver prices that vaulted over 7% to establish fresh lifetime peaks on the Multi Commodity Exchange (MCX). This dramatic upward movement was fueled by robust buying momentum across the commodity markets.
Record-Breaking Silver Futures on MCX
The MCX silver price for March futures contracts skyrocketed by as much as 7.52%, reaching an unprecedented record high of ₹3,83,100 per kilogram. This bullish trend extended across other contract months, with May futures ascending to a peak of ₹3,95,753 per kg, while July futures scaled a new zenith of ₹4,14,446 per kg, underscoring the intense buying pressure.
Silver ETFs Mirror the Metal's Rally
Silver ETFs perfectly mirrored the vigorous rally in the underlying precious metal. Leading funds including Mirae Asset Silver ETF, Axis Silver ETF, Motilal Oswal Silver ETF, Zerodha Silver ETF, Aditya Birla Silver ETF, and Nippon India Silver ETF each registered gains exceeding 6% during the trading session.
Simultaneously, a broader array of silver ETFs such as 360 ONE Silver ETF, Groww Silver ETF, SBI Silver ETF, HDFC Silver ETF, DSP Silver ETF, and several others advanced more than 5%, highlighting widespread investor participation and enthusiasm.
Analyst Outlook on Volatility and Fundamentals
Commenting on the near-term outlook, Jigar Trivedi, Senior Research Analyst at IndusInd Securities, noted that silver ETF prices could experience heightened volatility. He suggested they might move more sharply than spot silver prices if leveraged trading or sentiment-driven capital flows intensify in the coming sessions.
"Structural supply constraints continue to provide a solid foundation for prices, as silver is largely a by-product of other metals and production cannot be easily ramped up," Trivedi explained. "This is complemented by strong industrial demand from critical sectors like solar energy, electric vehicles, electronics, and emerging technology applications. Furthermore, safe-haven buying amid ongoing macroeconomic uncertainty and the environment of low or negative real yields adds additional positive momentum."
According to Trivedi's assessment, the overall outlook for silver remains decidedly bullish. Consequently, silver ETFs are likely to continue attracting healthy and sustained investor inflows as the trend persists.
Understanding Silver ETFs and Market Dynamics
Gold and silver ETFs are innovative investment vehicles that trade on stock exchanges similar to equities. These funds are securely backed by physical gold and silver bars stored in high-security vaults, offering investors a convenient avenue to gain exposure to precious metals.
In recent market action, silver prices have significantly outpaced gold, showcasing stronger relative performance. While industrial consumption historically drove silver demand, investment demand has emerged as a pivotal and powerful driver in recent months, reshaping market dynamics.
Surge in ETF Inflows Reflects Growing Popularity
Reflecting this pronounced shift in investor sentiment, silver ETFs recorded monumental inflows of ₹234.7 billion in 2025. This figure represents a sharp and substantial increase from the ₹85.69 billion recorded in the previous year, signaling a massive uptick in investor allocation towards silver.
The rapidly growing popularity of silver ETFs strongly indicates that imports destined for investment purposes could increase even further, provided the current vigorous price rally maintains its momentum. This trend underscores silver's evolving role not just as an industrial metal, but as a strategic investment asset class attracting significant capital.
Disclaimer: The views and recommendations presented above are those of individual analysts or broking companies, and not of Mint. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
