A historic run in 2025
Silver’s performance in 2025 was nothing short of remarkable. According to Axis Direct, “Silver extended its golden run in 2025 after returning over 20% in 2024. Prices posted their highest annual gains of over 100% since 1979.”The metal broke out of a multi-year consolidation phase and formed a major Rounding Bottom breakout pattern dating back to 2011-2013.
The structural breakout came as silver rose past neckline resistance by $50 per ounce to hit a new all-time high of $64, with analysts noting a clear long-term bullish trend formation.
What drove the silver rally in 2025?
Several fundamental and macroeconomic factors have contributed to the rapid rise in silver prices this year. One of the key shifts highlighted by Axis Direct is the decoupling of silver and gold:
“The silver market is undergoing a historic repricing event, marked by the decoupling of its traditional correlation with gold.” They added that the rally “was driven by the convergence of industrial scarcity and monetary tailwinds,” reflecting structural supply and demand imbalances in the silver market.
Another major contributor was the persistent supply shortage, which has persisted since 2021. Axis Direct highlighted: “The silver market has been in deficit since 2021, with a cumulative deficit of ~700 Moz over the period 2021-2025.”
According to Refinitiv data cited by the brokerage, the market is expected to remain in deficit through 2026, with the deficit expected to exceed 100 Moz.
On the industrial demand side, the emergence of green technologies played a crucial role.
“The photovoltaic (PV) sector has fundamentally changed the demand curve,” said Axis Direct. Demand from the solar energy sector has more than doubled from 94.4 Moz in 2020 to 243.7 Moz in 2024 and now accounts for more than 21% of total demand.
Axis Direct also flagged logistics constraints and tariff risks in the US as amplifying supply-side pressures: “Fear of looming US tariffs has triggered a flight of physical metal to US markets, creating a historic squeeze in the futures market.”
Need for caution?
Despite the strong upward trend, some market voices are urging caution. Justin Khoo, Senior Market Analyst at VT Markets, noted: “Silver has risen to an all-time high above $63.00 per ounce, underscoring the strength of the current bullish momentum, but its rapid rise also calls for caution.”
Khoo noted that the metal is “technically overloaded,” adding that entering new positions now carries an “unfavorable risk-reward profile.” He recommended waiting for a healthy retracement before considering new trades, although he insisted the broader outlook remains supportive.
Now that the Rs 2 lakh mark has been achieved, what’s next?
Commenting on the Indian futures market, Ponmudi R, CEO of Enrich Money, said:
“MCX Silver settled lower around Rs 1,92,600/kg, correcting sharply after touching a lifetime high above Rs 2,00,000 earlier this weekend.”
He added that near-term momentum is cooling even as the broader bullish framework remains intact. The 20 and 50 EMA cluster between Rs 1,66,000 and Rs 1,71,000 continues to provide structural support.
“The immediate resistance is at Rs 1,95,000 – Rs 2,00,000; regaining this zone could revive a move towards Rs 2,05,000+,” he noted, while warning that a break below Rs 1,90,000 could lead to a settlement towards Rs 1,85,000 – Rs 1,80,000.
However, the long-term outlook remains positive, supported by structural fundamentals. Axis Direct commented:
“A sustained monthly close above $67 could trigger a multi-year uptrend targeting $76-$80.”
In the Indian market, they foresee that “any correction up to between Rs 1,70,000 and Rs 1,78,000 can be used for staggered accumulation, targeting around Rs 2,40,000 by 2026.”
Also read: Jefferies sets Nifty target for December 2026 at 28,300 on improved valuations for EPS growth; lists the top 10 choices
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
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