The skyrocketing price of silver in India over the past four months has surprised everyone. The festive season, especially Dhanteras and Diwali shopping, has fueled this surge. The situation is such that a 10-gram silver coin, which was available for around ₹1,100 on Dhanteras last year, has reached close to ₹1,950 this year. This represents a 98% increase in prices in a single year, far surpassing even the rise in gold.
From investors to ordinary buyers, everyone now has one question: Will silver prices come down after skyrocketing? In major cities like Delhi and Mumbai, silver has crossed ₹1.89 lakh per kilogram, while in Chennai it has reached ₹2 lakh. This meteoric rise is due to a combination of global factors, industrial demand, and festive shopping. But the biggest question is: will this shine fade?
Why has the price of silver skyrocketed?
There's no single reason behind this extraordinary surge in silver prices. First, there's been a significant increase in industrial demand. Silver is an essential metal in the manufacture of electric vehicles (EVs), solar panels, and semiconductor chips. As the world moves toward green energy and technology, silver demand is also growing. Furthermore, amid ongoing tensions in the Middle East and Ukraine and global uncertainty, investors have viewed it as a "haven," similar to gold. Whenever a global crisis escalates, investors invest in precious metals, driving up both demand and prices. When these global factors are combined with the demand from the festive and wedding season in India, prices have skyrocketed.
Will there be relief after the holidays?
Market experts believe the answer is "yes," at least temporarily. Experts believe that the recent surge in silver prices is excessive, and the market is "overbought." According to Renisha Chainani, Research Head at Augmont, "After Diwali, when the pressure of festive demand subsides, the market may return to normal. We may see some softening in prices from next week."
Jigar Trivedi, Senior Analyst at Reliance Securities, also agrees. He says that after such a significant rally in such a short period, there is every possibility of a technical correction in the market. If investors book profits, the US dollar strengthens, or global tensions ease, silver prices could fall by 10 to 20 percent.
What factors could drive silver prices down?
Besides a decrease in festive demand, there are several other factors that could dim the shine of silver. According to a report by Motilal Oswal Financial Services, if the global economy slows down key industries like EVs or semiconductors, it will have a direct impact on industrial demand for silver, potentially leading to a decline in prices. Additionally, if a cheaper and better alternative to silver is found in the industry, demand could decline significantly, pushing prices down sharply. Approximately 12 million ounces were withdrawn from silver ETFs (Exchange-Traded Funds) in October 2025, indicating that investors are withdrawing at higher prices, which could put pressure on the market.
So, will silver shine again in the long term?
While silver prices are likely to decline in the short term, the long-term picture looks quite different. Experts believe that this silver rally is different from previous ones (1980, 2011), which were based solely on speculation and subsequently collapsed. The current rally is based on real and consistently growing demand from industries like technology and green energy. A Motilal Oswal report estimates that silver prices could reach ₹246,000 per kilogram by 2027. A major reason for this is the growing gap between supply and demand. Mining production is lagging behind demand, leading to a global silver shortage. Therefore, while buyers may find some relief after Diwali, silver remains a promising investment in the long term.
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