Sunday, August 3, 2025

Silver is rallying — here’s why experts say it may run further

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Silver is back in the spotlight as investors chase its blend of industrial and safe-haven appeal. Backed by strong demand from sectors like solar and electric vehicles (EVs), and supported by a tight supply pipeline, silver prices have jumped nearly 25% year-to-date to about $38 per ounce.Experts believe the metal still has room to run.
Client Associates (CA), a multi-family office, projects a 15-20% upside for silver over the next 12-24 months, driven by what it calls a “persistent supply-demand mismatch” and industrial tailwinds.

“Silver is no longer just a precious metal — it is a modern asset class backed by industrial relevance and historical trust,” said Nitin Aggarwal, Director of Investment Research & Advisory at Client Associates.Inderbir Singh Jolly, CEO — Wealth at PL Capital, noted that silver’s dual role is driving its popularity.

“Silver’s unique dual appeal as an industrial and precious metal makes it an ideal long-term asset for Indian investors today. With the EV and solar boom, coupled with macroeconomic hedging needs, silver is increasingly being viewed as a strategic allocation,” Jolly said.

Tata Mutual Fund in its recent outlook agrees. It said silver stands to benefit from the same safe-haven flows that drive gold, while its extensive use in solar panels, semiconductors, and clean tech makes it a growth bet too.

Supply crunch adds fuel

Analysts highlight that supply constraints are keeping prices buoyant. Only about 28% of global silver supply comes from direct mining; the rest is mostly a by-product of mining other metals like copper and lead. This makes silver output vulnerable to swings in other commodities.

Client Associates estimates the global silver market ran a deficit of nearly 149 million ounces in 2024 — marking the fourth straight year of shortfall. This tightness could persist as clean energy projects and digital infrastructure ramp up demand.Gold-silver ratio signals value

Silver also looks cheap relative to gold. The gold-silver ratio is hovering near 90, well above its historical average of about 68. If gold stays steady and the ratio narrows, silver could gain further ground, say analysts.

How to play silver

For Indian investors, silver ETFs and fund-of-funds (FoFs) are emerging as easy ways to gain exposure without storing physical silver. CA suggests ETFs for shorter holding periods and FoFs for larger, longer allocations.

Tata Mutual Fund also sees medium-term potential, suggesting a combined gold-silver allocation to balance risks.

Risks remain

While the outlook is bright, experts warn of risks. Any surge in mining output, slower industrial growth, or a switch to alternative materials in electronics or solar could cap gains.

Still, with macro uncertainties and a green energy push, many wealth managers see silver’s dual story as too good to ignore.

ALSO READ | Gold prices edge higher on weak dollar; investors eye US Fed decision

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