Silver Breaks ₹2 Lakh per kg Barrier for First Time as Demand Surge Drives Sharp Rally

The surge caps an extraordinary rally in 2025, with silver gaining ₹1,14,733 so far this year. The pace of the rise stands in sharp contrast to its earlier trajectory, when the metal took nearly 14 years to move from ₹50,000 to ₹1 lakh per kg.

Gold prices also firmed up, though at a more measured pace. The yellow metal rose ₹936 to ₹1,32,713 per 10 grams. Gold had touched a lifetime high of ₹1,33,442 on December 15 before easing slightly. IBJA data showed strength across all purities, supported by safe-haven demand and firm global cues.

Market participants attributed silver’s sharp rally to a combination of structural and short-term factors. Strong industrial consumption, particularly from solar energy, electronics and electric vehicle manufacturing, has significantly lifted demand. At the same time, concerns over global supply disruptions have prompted manufacturers and traders to build inventories.

Investment flows have added further momentum. Growing participation through silver exchange-traded funds has widened the investor base beyond traditional jewellery demand. Trade uncertainties and tariff-related fears in the US have also encouraged advance buying, tightening supply in the spot market.

Price disparities across cities continue due to local taxes, making charges and jewellers’ margins, as IBJA rates exclude GST. These benchmark rates are, however, used by the Reserve Bank of India for sovereign gold bond pricing and by banks for gold loan valuations.

India remains the world’s largest consumer of silver, using around 7,700 tonnes in 2024, with nearly 80% of the requirement met through imports. Analysts expect volatility in the near term but believe strong industrial fundamentals could keep silver prices elevated in the coming months.