According to the India Bullion and Jewelers Association (IBJA), Indians sold an estimated 100 tonnes of old silver in a week. A record jump was recorded in metal prices on Wednesday. Typically, only 10-15 tonnes of old silver reaches the Indian market a month and data for the week ending Wednesday indicates a rush to take advantage of this price. IBJA national secretary Surendra Mehta attributed the increase in old silver sales to profit-booking as well as domestic demand for cash due to travel during the ongoing wedding season and holidays. He said that a large part of this is scrap of silver utensils and utensils.
According to IBJA data, silver reached a record high of Rs 1,78,684 per kg in the retail market on Wednesday. Although the price fell to Rs 1,75,730 on Thursday, it is still about 20 percent higher than the recent low. Analysts say that the race for profit booking may increase, because the price may touch the level of Rs 2 lakh in the near future.
Silver prices have risen due to reduced supply, rising expectations of interest rate cuts in America and adverse performance of the dollar against major global currencies and the rupee. The dollar weakened at the global level, but it strengthened against the Indian currency.
Mehta said that during Diwali and Dhanteras, silver reached Rs 1.78 lakh per kg, then fell to Rs 1.49 lakh. Now that prices are rising again, people are selling metal to raise cash. Silver, whose price is set to more than double to Rs 86,005 per kg in 2024, has outperformed almost every major asset class this year. In comparison, gold has grown by about 60 percent.
Naveen Damani, head of commodity research at Motilal Oswal Financial Services, expects this rally to continue due to increasing supply shortage. He estimates that silver will reach Rs 2 lakh per kg in the first quarter of 2026 and Rs 2.4 lakh per kg by the end of next year, and its prices in dollar terms could potentially reach $75 an ounce.
According to the Washington-based Silver Institute, since 2020, the global demand for silver has exceeded the supply. Most silver mining occurs as a byproduct of gold, lead or zinc mining. Therefore, unless the mining of these metals increases, the supply of silver will also remain limited. The supply of mined silver in 2025 remains stable at 813 million ounces.
Increases in production in Mexico and Russia are balanced by declines in Peru and Indonesia. The Silver Institute estimates that primary silver production will increase by only 3 million ounces in 2025 compared to 2024, to 227 million ounces. Total supply, including recycled content, is estimated at 1.022 billion ounces, which is less than the estimated demand of 1.117 billion ounces.
