Blended with multiple positive catalysts, investors’ interest in silver has been strengthening day by day, keeping the prices of the white metal elevated and helping it emerge as the top performer among major asset classes.

After a blistering 170% rally in MCX silver prices, the momentum has continued, with prices surging by another 22% in January so far. From the April close of ₹95,917, silver has rallied 200% to ₹2,87,762″>Friday’s close of ₹2,87,762, mimicking the performance of a multibagger stock.

As silver prices continue to hit new records, with the latest peak of ₹2,92,960 last week, analysts have quickly revised their target prices higher, as the metal surpassed their earlier projections sooner than expected, indicating demand is building far faster than anticipated.

In the same period last year, domestic brokerage firm Motilal Oswal had anticipated silver rates to reach ₹1,10,000 by year-end, but those levels were crossed in the first half, and the price went on to reach ₹2,54,000, more than doubling the brokerage’s original target.

The dual nature of silver—extensively used in many industries and also considered a precious metal—has caused it to remain in structural deficit for five consecutive years. Industry, investment, and manufacturing demand are exceeding what miners can produce.

This means existing above-ground stockpiles are being drained to meet demand. As those reserves shrink, holders of physical silver are demanding increasingly higher prices to part with it.

At the start of 2025, silver was far from investors’ radar, with little expectation that the metal would take center stage and mount such a sharp rally in a year marked by economic and geopolitical concerns.

In addition, global central banks seem to have shifted their focus to silver after accumulating large quantities of gold over the past three years. Recent reports suggest that central banks have started adding silver to their vaults alongside the yellow metal, another factor keeping MCX silver prices near the ₹3 lakh marks.

Central Bank purchases and industrial demand keep silver, gold strong

Ponmudi R, CEO of Enrich Money, said that the broader rally in precious metals is underpinned by structural factors rather than speculative excess. He noted that chronic supply shortages, especially in silver, sustained central bank gold purchases, accelerated demand from green energy, EVs, AI, and electronics, and ongoing macro and geopolitical uncertainties continue to support the long-term bullish narrative.

The recent corrections are primarily driven by position unwinding and dollar strength, not by any deterioration in underlying fundamentals. He added that a gradually firm USD/INR further supports rupee-denominated metal prices.

Ponmudi explained that while near-term volatility may persist due to profit-taking, dollar movements, and key US macro data, any corrective phases are expected to remain shallow and attract buying interest.

He said that silver continues to offer relative outperformance potential due to its higher industrial leverage, while gold remains a reliable hedge against macro and geopolitical uncertainty.

Can MCX silver prices cross the ₹3 lakh marks?

Considering the latest close of ₹2,87,762, the silver rate is just 4.2% away from ₹3 lakh milestone”>crossing the ₹3 lakh milestone, with analysts expecting that this level could be reached in the near term, despite some pullback in prices in recent sessions.

Ponmudi expects silver prices to touch ₹3,20,000 if it remains above ₹2,95,000. He added, “MCX Silver continues to respect its bullish channel structure after consolidation. The ₹2,83,000– ₹2,80,000 zone acts as strong support, while a sustained move above ₹2,95,000 could accelerate prices toward ₹3,05,000– ₹3,20,000. Given the persistent supply gaps and rising industrial demand, the broader setup continues to favor aggressive dip-buying strategies.”

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.