Silver prices in India soared to an unprecedented peak during futures trading on Wednesday, mirroring a powerful global rally. The surge is fueled by expectations of interest rate cuts in the United States next year and a significant squeeze in physical supply.
Domestic Markets Scale New Heights
On the Multi Commodity Exchange (MCX), the most active silver futures contract for March delivery skyrocketed by Rs 8,179. This represents a massive gain of 4.14%, propelling the price to a historic high of Rs 2,05,934 per kilogram. This record was set from a previous closing level of Rs 1,97,755 per kg.
Looking further ahead, the May 2026 silver contract also achieved a new peak. It climbed by Rs 8,148, or 4.06%, to reach Rs 2,08,796 per kg.
Gold prices also moved higher, though more modestly compared to silver's explosive rally. Gold futures for February delivery gained Rs 169, a rise of 0.13%, to trade at Rs 1,34,578 for every 10 grams. The April 2026 gold contract increased by Rs 273, or 0.2%, to Rs 1,37,683 per 10 grams.
Global Drivers and Expert Commentary
The rally was not confined to Indian markets. Internationally, gold futures on the Comex exchange advanced by USD 21.1 to USD 4,353.4 per ounce. However, silver dramatically outperformed, with Comex futures breaching the USD 66 per ounce mark for the first time ever. The March contract jumped USD 2.95, or 4.65%, to set a record high of USD 66.27 per ounce.
Manav Modi, Analyst for Precious Metals at Motilal Oswal Financial Services Ltd, explained the momentum. He stated that gold found support after a US jobs report showed a rising unemployment rate in November. This data boosted expectations for further US interest rate cuts in 2025, simultaneously pressuring the US dollar and bond yields.
Commenting specifically on silver's extraordinary surge, Modi pointed to clear signs of a supply crunch. "Silver's backwardation rises once again indicating tight supply squeeze in the market pushing prices to all-time highs at USD 66 in the early morning session," he said. Backwardation, where near-term prices are higher than future prices, is a classic indicator of immediate physical shortage.
Market Awaits Crucial Inflation Data
All eyes are now on key economic indicators from the United States that could shape the near-term trajectory for precious metals. Investors are keenly awaiting the release of the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) price index later this week.
Modi noted that this data will provide fresh cues on the Federal Reserve's monetary policy outlook. The readings on inflation will be critical in determining whether the central bank will proceed with anticipated rate cuts, which typically boost the appeal of non-yielding assets like gold and silver.
The combination of aggressive speculative buying, tangible supply constraints for silver, and a shifting macroeconomic landscape toward easier monetary policy has created a perfect storm, driving prices to levels never seen before.
