Indians Sell 100 Tonnes of Silver During Festive Season
Silver prices have reached unprecedented heights, prompting a surge in the sale of old silver in India. The India Bullion & Jewellers Association (IBJA) reports that approximately 100 tonnes of old silver were sold within a week, a volume that typically takes months to accumulate. This spike in sales is attributed to soaring prices, which peaked at Rs 1,78,684 per kilogram, before slightly easing to Rs 1,75,730. The increase in silver prices, nearly 20% higher than recent lows, has led many families to liquidate their silver assets for cash, especially during the festive season.
Record Silver Prices Drive Sales
The recent surge in silver prices has caught the attention of many Indian households. According to the IBJA, the price of silver reached a record high of Rs 1,78,684 per kilogram on Wednesday. Although prices dipped slightly to Rs 1,75,730 the following day, they remain significantly elevated compared to previous months. Typically, the domestic market sees only 10 to 15 tonnes of old silver sold in a month, but the recent spike has led to an influx of around 100 tonnes in just one week. This dramatic increase is largely driven by profit-taking and the need for liquidity during the festive season, which includes weddings and holiday travel.
Surendra Mehta, the national secretary of IBJA, noted that many families are opting to sell their silverware and utensils to generate cash. He explained that the recent price fluctuations have prompted individuals to offload their silver assets, especially after witnessing the price rally during significant festivals like Diwali and Dhanteras. The price of silver had previously surged to Rs 1.78 lakh per kilogram before dropping to Rs 1.49 lakh, and now, with prices climbing again, many are looking to capitalize on the current market conditions.
Future Price Predictions and Market Dynamics
Analysts are optimistic about the future of silver prices, with some predicting that they could reach Rs 2 lakh per kilogram by early 2026. Naveent Damani, head of commodities research at Motilal Oswal Financial Services, believes that the current upward trend in silver prices is likely to continue. He attributes this to a persistent supply shortage, which has been a trend since 2020. The global demand for silver has consistently outpaced supply, leading to a market deficit.
The Silver Institute’s data indicates that most silver is produced as a by-product of mining other metals, such as gold, lead, or zinc. This production limitation restricts the potential for sudden increases in output. For 2025, mined silver production is expected to remain flat at 813 million ounces, with only a slight increase in primary silver production. The total supply, including recycled silver, is projected at 1.022 billion ounces, which falls short of the estimated global demand of 1.117 billion ounces.
Impact of Global Trends on Local Markets
The dynamics of the global silver market have significant implications for local markets in India. The persistent supply deficit has created an environment where prices are likely to continue rising. As demand remains strong, particularly in the context of increasing household needs during festive seasons, the appetite for silver is expected to grow. This trend is further compounded by the fact that silver has outperformed other asset classes this year, with its price more than doubling from Rs 86,005 per kilogram in 2024.
In contrast, gold has seen a gain of approximately 60% during the same period. The disparity in performance between silver and gold is prompting investors and households alike to reconsider their asset allocations. As families seek to capitalize on the rising prices, the influx of old silver into the market is likely to continue, reflecting broader trends in consumer behavior and investment strategies. With analysts forecasting further price increases, the silver market remains a focal point for both investors and everyday consumers in India.
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