Silver prices are showing resilience, recovering from a sharp fall experienced recently. This rebound follows a period of significant gains, with silver outperforming other precious metals in 2025. On December 30, 2025, silver rose to $74.57 per troy ounce, a 1.93% increase from the previous day. Despite the recent volatility, the long-term outlook for silver remains bullish due to several key factors.

Recent Price Action

Silver prices experienced a notable surge in 2025, reaching record highs. On the Multi Commodity Exchange of India Limited (MCX), silver hit a record high of ₹2,54,174 per kg on December 29, 2025. However, this was followed by a sharp correction, with prices falling by ₹21,000 to close at ₹2,33,120. Globally, silver prices tumbled from highs above $83 an ounce to the low $70s, marking the biggest intraday decline since 2021. Despite this pullback, silver prices in India rose again, with MCX Silver increasing over 4%. The spot silver price rose about 1% to $73.06 an ounce in Singapore.

Factors Driving the Long-Term Bullish Outlook

Several factors contribute to the positive long-term outlook for silver:

• Structural Supply Deficit: The silver market has been experiencing a persistent supply deficit, with demand exceeding supply for the last five years. This deficit is expected to continue, supporting higher prices.

• Strong Industrial Demand: Silver's unique properties make it essential in various industrial applications, including electronics, solar panels, and medical devices. The demand from these sectors is expected to remain robust, driving silver prices higher. Growth in the AI sector is also expected to contribute to increased demand.

• Geopolitical Tensions and Economic Uncertainty: Silver is considered a safe-haven asset, and geopolitical tensions and economic uncertainty often lead to increased investment demand. As a hedge against inflation and currency devaluation, silver tends to retain its purchasing power.

• Federal Reserve Rate Cuts: Anticipated and actual interest rate cuts by the U.S. Federal Reserve enhance silver's appeal as a non-yielding asset. Lower interest rates make silver more attractive to investors.

• Gold-Silver Ratio: The gold-to-silver ratio, which tracks the relative value of the two metals, suggests continued outperformance of silver relative to gold.

Potential Price Targets

Analysts have offered various price targets for silver in the coming years. One analyst suggests that after breaching ₹2.50 lakh, silver prices could reach ₹2.8–₹3.2 lakh by the end of 2026, potentially ranging from $65 to $80 per ounce, with upside risks towards $95–$100 if supply disruptions persist and rate cuts deepen. Another analysis puts silver at US$150 by Summer 2026 with a stable top end of $200-$225 thru the next five years.

Investment Strategies

Given the volatility of silver prices, experts recommend a disciplined investment strategy. Investors are advised to accumulate positions during price dips and consider investing in a staggered manner. Silver ETFs (exchange-traded funds) are often recommended as a convenient and cost-effective way to invest in silver.

Factors to Watch

Several factors could influence silver prices in the future:

• Supply disruptions: Unexpected disruptions in silver mining or refining could tighten supply and increase prices.
• Changes in industrial demand: Shifts in demand from key industrial sectors, such as electronics or solar energy, could impact silver prices.
• Monetary policy: Changes in monetary policy by central banks, particularly the Federal Reserve, could affect silver's attractiveness as an investment.
• Geopolitical events: Escalations in geopolitical tensions or shifts in government policies could drive safe-haven demand for silver.

Overall, while silver prices are subject to short-term volatility, the long-term outlook remains positive, supported by strong fundamentals and increasing demand from various sectors.