A "white" storm is brewing. Now you might ask, what is this white storm? Well, we're not talking about anything else but silver, whose prices are seeing a tremendous surge. When the country's futures market closed on Tuesday, silver prices were seen crossing the ₹2.07 lakh mark. During the trading session, silver even set a new record. However, silver prices aren't rising without reason. There are several factors behind this, the most important being the increase in industrial and investment demand for silver.

Meanwhile, a decrease in supply and production is also driving up silver prices globally. The depreciation of the Indian currency is also impacting silver prices. According to experts, the kind of US jobs data that has come out suggests that the Fed might implement another rate cut in the coming days. If this happens, silver prices could see a further increase. Let's discuss this in detail.

Silver Outperforms Gold
Recently, silver has outperformed gold in the precious metals sector, with COMEX futures prices crossing $66 per ounce for the first time. The March 2026 contract saw a 5.25 percent increase, reaching a lifetime high of $66.65 per ounce. Market expert Ajay Bagga described silver's performance as "faster than gold," indicating a comeback for silver after a prolonged period of underperformance compared to gold. Historically, silver tends to outperform gold in major bull markets for precious metals.

Increase in Industrial and Investment Demand
Bagga explained that other factors driving the demand include industrial requirements, investment flows, and supply shortages. He said, "Add to this the surge in high-tech/industrial demand and investment demand, and you have a sufficient basis for a more than 110 percent increase in silver prices this year." Kaynat Chainwala, AVP of Commodity Research at Kotak Securities, said that the silver rally is due to lower physical supply, increasing safe-haven demand, strong investment in silver ETFs, and growing expectations of interest rate cuts by the US Federal Reserve.

Silver Outperforms Crude Oil
Silver prices have outperformed crude oil. Crossing the $65 mark symbolizes the beginning of a new era for silver. Silver has sent a clear message to the market by outperforming crude oil for the first time in 40 years: the future belongs to tangible, essential, and rare commodities. Aamir Makda, Commodity and Currency Analyst at Choice Broking, said that the rising unemployment rate in the US, currently at 4.6 percent, could lead to interest rate cuts by the Federal Reserve in 2026, further boosting demand for silver.

Makda further added that the price of silver is higher than that of US and Gulf crude oil. This reversal has not been seen since the late 1970s and early 1980s, indicating that this industrially demanded metal is becoming as strategically important as energy.

Supply Shortage and Currency Impact
Silver supply remains in deficit for the fifth consecutive year. The continuous weakening of the rupee against the dollar has further exacerbated the situation. This has led to a surge in the prices of dollar-denominated commodities. The rupee has depreciated by about 6 percent against the dollar this year. Experts believe that the rupee's depreciation is expected to continue until the first half of calendar year 2026. This means that the next six months will be crucial for silver. Silver Prices at Record Levels

In the country's futures market, silver prices reached record levels on the Multi-Commodity Exchange on Tuesday. Late Tuesday night, silver prices touched a lifetime high of ₹2,07,833, and after the market closed, the price settled at ₹2,07,435. However, on Thursday morning, silver prices were trading with a slight decline. According to the data, at 9:40 AM, silver prices were trading at ₹2,06,982, a decrease of ₹453, which is ₹851 less than the record level. On the other hand, gold prices are also showing weakness. At 9:40 AM, gold prices were trading at ₹1,34,770, a decrease of ₹124.

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