Silver prices have surged to record highs on the Multi Commodity Exchange (MCX) and in global markets, prompting investors to take note. On December 17, 2025, silver prices on the MCX jumped over 4%, reaching ₹2,04,445 per kg, marking a lifetime high. Globally, spot silver prices also soared, crossing the $65 per ounce threshold for the first time, reaching $65.63 an ounce.

Factors Driving the Rally

Several factors have contributed to this surge in silver prices:

• Weaker US Labor Data: Recent US labor data revealed an increase in the unemployment rate to 4.6% in November, exceeding expectations. This has reignited expectations of interest rate cuts by the Federal Reserve, weakening the dollar and boosting demand for precious metals.
• Geopolitical Tensions: Rising geopolitical tensions, such as President Trump's order to blockade sanctioned oil tankers entering and leaving Venezuela, have increased demand for safe-haven assets like silver.
• Industrial Demand: Silver's use in various industries, including electronics and green technologies, has sustained strong demand, contributing to its price increase.
• Supply Deficit Concerns: Markets anticipate a potential silver supply deficit in 2026, further fueling the price rally.
• Dollar Weakness: A weaker US dollar makes dollar-priced bullion more attractive to overseas buyers, increasing demand and prices.

Market Performance

The surge in silver prices has outperformed gold, indicating a divergence between the two precious metals. While MCX silver jumped 3.38%, MCX gold (February) slipped 0.21% to ₹1,34,129 per 10 grams. Spot gold edged 0.4% higher to $4,321.56 an ounce. Silver's performance in 2025 has been remarkable, with yearly gains exceeding 100%, marking the highest annual rise since 1979.

What Investors Should Know

• Volatility: Silver is known for its volatile nature, with potential for spectacular rallies followed by steep declines. Investors should be prepared for price swings and manage their risk accordingly.
• Long-Term Bullish Trend: Despite potential corrections, analysts note a clear long-term bullish trend formation for silver.
• Safe-Haven Asset: Silver is considered a safe-haven asset, particularly during times of economic uncertainty and geopolitical instability.
• Industrial Demand: The metal's industrial applications provide a fundamental demand base, supporting its long-term value.
• Rupee Depreciation: According to Rahul Kalantri from Mehta Equities, rupee weakness will keep domestic bullion prices elevated.

Expert Recommendations

While some experts suggest caution due to silver being technically overstretched, the broader outlook remains supportive. Justin Khoo, Senior Market Analyst at VT Markets, advises waiting for a healthy retracement before considering new positions. Manoj Kumar Jain of Prithvi Finmart Commodity Research suggests waiting for corrective dips to initiate fresh long positions in gold and silver and avoiding short selling in both precious metals.

Potential Targets

Some analysts predict silver could rally to $100 an ounce, which is around ₹3 lakh per kg. However, it's crucial to remember that silver is prone to significant price corrections.

Disclaimer: This article is for informational purposes only and should not be considered as financial advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.