Silver’s record rally continues, analysts see further 20% upside by Q1 2026

Mumbai: The record-breaking run in silver, a top-performing asset this year, is seeing no signs of ebbing as strong investor demand amid supply pressures could drive prices to higher levels. The white metal, which hit a new all-time high of over $67 per ounce in international markets on Friday after more than doubling in 2025, may be on course to further run up by as much as 20% in the first quarter of 2026, said analysts. Silver could rise to $70-80 range by March, they said, advising buy on dips investment strategy at these levels. It has gained over 127.5% in 2025. "Silver's rally is being driven by tight physical supply in London and China, as a rise in exports to the US amid higher Comex premiums has created an imbalance or squeeze in the physical market," said Riya Singh, research analyst at Emkay Global. A global rise in demand for silver ETFs, which are backed by purchases of physical silver, has further intensified the supply squeeze. "A significant build-up of physical silver, driven by retail and high-net-worth individuals' (HNI) investments in ETF products, is now backed by nearly two years of global consumption demand," said Pranav Mer, vice president - commodity and currency research at JM Financial Services. Silver's scorching rally comes on the heels of gold's record surge as inflationary pressures have boosted demand for precious metals. There is more to silver's recent popularity than its role as a store of value; its growing industrial use. The metal is increasingly used in solar panels, electric vehicles, and AI-related technologies-industries that are seeing swelling investments in recent years. 126112036 Upside drivers for silver prices are expected to strengthen further in the coming year. Kaynat Chainwala, assistant vice president - commodity research at Kotak Securities, said that China's plans to restrict silver exports starting in 2026 could disrupt a key global supply source and tighten the market further. Naveen Mathur, director - commodities and currencies at Anand Rathi Share and Stock Brokers, said while the supply deficit is likely to persist through 2026-27, gains may be more moderate compared with 2025. "Meanwhile, it could still outperform gold in the first quarter of 2026," he said.NEAR-TERM CAUTION Silver prices may remain subdued until the end of the year. Mathur said prices could consolidate in the remaining sessions of 2025, with trading volumes expected to stay low due to Christmas holidays and yearend closures in major markets. Chainwala cautioned that given silver’s inherently high volatility, investors should remain careful at current levels. “Any signs of a US recession or renewed concerns around an AI-led market bubble could trigger sharp pullbacks in prices,” she said.