The silver market in India witnessed a historic surge on Friday, with prices scaling an unprecedented peak. The precious metal's dramatic ascent has captured the attention of investors and traders across the nation.
Record-Breaking Rally in Domestic and Global Markets
In the national capital, silver prices reached a fresh all-time high of ₹2,36,350 per kilogram. This marked a sharp single-day increase of ₹9,350. The rally comes on the back of a sustained upward trend, as the metal had closed at ₹2,27,000 per kg just two days prior, on Wednesday.
The momentum over the last four trading sessions has been nothing short of spectacular. Silver has rallied by a staggering ₹32,250, or 15.8 per cent, climbing from a level of ₹2,04,100 per kg recorded on December 19.
The bullish sentiment was mirrored in international markets. For the first time in overseas trade, spot silver surged past the critical $75-per-ounce mark. It jumped by $3.72, or 5.18%, to set a fresh global record high of $75.63 per ounce.
Expert Analysis and Long-Term Performance
Ponmudi R, CEO of Enrich Money, commented on the surge, noting that MCX Silver extended its sharp advance to ₹2,40,935 per kg. He attributed the nearly ₹30,000 rise over the past week to strong global cues and ongoing supply constraints. "The broader rising channel continues to support the move, reinforcing the strength of the trend," he stated.
Taking a broader view, the calendar-year performance of silver has been extraordinary. From its price of ₹89,700 per kg on December 31, 2024, the metal has witnessed a monumental jump of ₹1,46,650, translating to a gain of 163.5 per cent.
Meanwhile, gold has also seen a powerful rally this year, surging by ₹63,350. This marks an 80.24% rise from its price of ₹78,950 per 10 grams at the end of 2024.
Future Outlook: How High Can Silver Go?
Analysts are now looking ahead to the metal's potential in the coming year. NS Ramaswamy, Head of Commodity & CRM at Ventura, shared his insights with Mint. He projected that silver prices could surge by an additional 18% from current levels. He explained that the white metal tends to excel during periods of robust global economic growth, thanks to its significant industrial applications.
"Conversely for Silver, during economic downturns, industrial demand can drop sharply, causing prices to fall more dramatically than gold," Ramaswamy cautioned. He added that the current rally in silver is considered more tenable and likely to outperform gold in the near term, albeit with higher volatility. Fundamental support comes from its price inelasticity, smaller market size, and inelastic supply features.
Investment Strategy: Gold vs. Silver
When deciding between the two precious metals, Ramaswamy advises investors to view them with distinct mindsets. The choice fundamentally depends on an individual's risk tolerance.
He elaborated that investment in gold offers better stability and wealth preservation, acting as a classic safe haven. On the other hand, Silver presents higher growth potential accompanied by greater volatility, a characteristic often preferred by the trader community.
"Silver often swings more while Gold appears to move very cautiously in a steadier fashion. Hence a mix of both is recommended," he suggested. The optimal choice hinges on one's investment horizon, risk appetite, and financial goals. He also pointed out that while gold is already in a 10-year bull run, silver's rally is closer to 5.5 years, indicating significant room for catch-up.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
