Silver Outperforms Gold: ETFs Deliver Impressive Returns for Investors
Silver has emerged as the top-performing investment of 2025, boasting an impressive average return of 102% for investors through exchange-traded funds (ETFs), as reported by ET. The white metal, once overshadowed by gold, is currently trading at approximately Rs 1.8 lakh per kg in the spot market. Analysts predict that domestic prices could soar to Rs 2.46 lakh in the long term, driven by strong demand and supply constraints.
Silver’s Performance Compared to Other Assets
This year, silver has significantly outperformed traditional assets. While gold ETFs have yielded returns of 63%, major stock indices like Sensex and Nifty have only seen increases of 6-7%. On the international front, silver recently reached a record high of $53.60 per ounce, with MCX December futures trading at Rs 1,62,700. This surge is attributed to a tight physical market and rising premiums due to global shortages. Analysts from Motilal Oswal emphasize that this rally is distinct from previous speculative surges in 1980 and 2011, as it is underpinned by sustained demand from sectors such as green energy, electric vehicles (EVs), solar technology, and 5G. They believe that crossing the $50 mark is not merely a technical achievement but signifies a necessary structural adjustment to align supply constraints with increasing demand.
Future Price Projections and Market Dynamics
Looking ahead, analysts expect silver prices to stabilize between $50 and $55 in the coming months, with potential peaks reaching $75 per ounce by 2026 and $77 by 2027 on the COMEX. Assuming an average exchange rate of 90 USD to INR, this could translate to prices of Rs 2.4 lakh by the end of 2026 and Rs 2.46 lakh domestically. The ongoing global supply constraints are a significant factor supporting silver’s price increase. Approximately 70% of silver production is a by-product of mining for other metals such as zinc, lead, copper, or gold, which limits production flexibility. The Silver Institute forecasts that 2025 will mark the fifth consecutive year of a structural market deficit, estimating a shortfall of around 118 million ounces. Industrial demand, particularly from green economy applications, is projected to rise by 3% this year.
Investor Sentiment and Market Outlook
Despite potential short-term price dips, analysts from Nomura view these fluctuations as opportunities for investors to leverage silver’s strong fundamentals. Bank of America has also raised its silver price target to $65, even while anticipating an 11% decline in demand next year, citing ongoing supply shortages. The growing enthusiasm for silver is not limited to institutional investors; personal finance author Robert Kiyosaki has recently endorsed the metal, labeling it and Ethereum as “hot, hot, hot.” He predicts that silver could reach $75 per ounce after recently surpassing the $50 threshold.
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