Safe-haven demand, supply tightness and global uncertainty drive sharp rally; experts advise buying on dips for long term
Silver prices surged sharply on Monday, hitting a fresh lifetime high of ₹3 lakh per kilogram on the Multi Commodity Exchange of India (MCX), as strong global cues and safe haven demand continued to fuel the rally in precious metals.
On the MCX, silver gained over 5% in intraday trade, taking its cumulative rise to nearly 28% in calendar year 2026 (CY26) so far. The metal had already delivered a stellar 216.7% return in CY25, emerging as one of the best-performing asset classes.
In international markets, silver prices climbed nearly 4% to cross $93.5 per ounce, extending their gains to about 196% over the past one year, according to market data.
Bullish outlook despite sharp run-up
Despite the steep rally, analysts remain optimistic about silver’s medium to long-term prospects, though they caution that volatility is likely to remain elevated.
Nigel Green, chief executive officer of deVere Group, said silver’s move above the $90 per ounce mark signals a decisive shift in investor sentiment.
According to Green, the rally is being driven by a mix of factors including mounting political pressure on the US Federal Reserve, rising expectations of interest rate cuts, escalating geopolitical tensions, and recent developments around US trade policy.
“Silver has significant room to run. Structural demand, constrained supply, and a global investment climate shaped by policy uncertainty point to far higher prices,” Green said, adding that deVere projects silver prices could reach $200 per ounce by the end of the year. He noted that sharp swings are part of any major repricing phase, but the broader trend remains upward.
Buy-on-dips strategy recommended
G Chokkalingam, founder and head of research at Equinomics Research, advised investors to buy silver on corrections and hold it with a long-term perspective.
“The rally started in 2025 and has been beyond imagination. A correction of 10–20% can happen in the short to medium term, which can be used as a buying opportunity,” he said.
Chokkalingam added that silver resale by Indian households and a possible increase in mine supply could temporarily cap prices. However, he expects silver to rise another 10% over the next six months, albeit with intermittent volatility.
Supply tightness remains a key factor
According to James Steel, chief precious metals analyst at HSBC, tightness in the London market and extreme backwardation on CME futures point to a near-term shortage of deliverable silver, a situation that may persist until later in 2026.
Steel noted that expectations of a softer US dollar, potential Fed rate cuts, and ongoing geopolitical risks are likely to continue supporting silver prices on any declines.
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