MUMBAI: Silver future prices crossed the historical Rs 2 lakh-per-kg milestone Friday, extending the rally that has seen the metal soar nearly 130% this year, while gold, which has rallied more than 75% so far this year is also nearing the peak it had witnessed in October when it had crosses the Rs 1.3 lakh mark for 10 grams.
Analysts are seeing further upsides to both the metals, with the white metal heading towards Rs 2.2 lakh per kg in the medium terms and the yellow metal touching Rs 1.5 lakh/10 grams.
In the international market, the metals have gained 7% in the week and is trading at $4364/ounce, sniffing closer to the October 21 peak of $4,381.58/oz, and is at a seven week high, while silver has been above the $62/oz market and is trading at $64.50/oz Friday evening, headed for a 9.5% weekly gain.
Many analysts have $5000/oz for gold for 2026. The yellow metal has rallied over 75% this year on a back of a 24% jump in 2024 which was on a 22% gain in the previous year.
Gold rally is bolstered by a softer dollar, expectations of interest more rate cuts and safe-haven demand prompted by geopolitical turbulence, while silver hit a record high. Non-yielding assets such as gold tend to benefit in low-interest-rate environment. Prices have more than doubled this year, supported by strong industrial demand, dwindling inventories and its inclusion on the US critical minerals list.
On the MCX, silver futures rose as much as Rs 2,00,362/kg. So far this year, the metal has risen by 129%, while the gold has surged 75%.
Anindya Banerjee, the head of currency and commodities at Kotak Securities told TNIE that the current rally is driven by the amplified concerns about a faster dollar debasement and the resultant response investors have towards gold and silver.
“Silver is also benefiting from a notable physical squeeze. Asian buyers are aggressively demanding physical delivery, while Western sellers are finding it increasingly difficult to meet their derivative‐linked obligations,” Banerjee said, offering a firmly bullish outlook with gold’s medium-term upside moving towards Rs 1,50,000/10 grams and for silver the upside heading towards Rs 2,20,000/kg.
The silver rally is primarily driven by demand-supply imbalance and safe haven appeal, analysts said.
According to Axis Securities, many of the performance drivers for silver mirror those supporting gold, including a weaker dollar, uncertainty around the Federal Reserve's policy path, geopolitical tensions, global economic fragility and volatility in the Japanese bond market.
The white metal has also drawn support from elevated copper prices, reflecting an industrial demand crossover, while gains in gold have provided additional tailwinds, analysts said.
According to Axis Securities, silver supply remains inelastic despite rising prices, as most mined silver is produced as a by-product of lead, zinc and copper mining, limiting the ability of producers to scale output quickly.
Overall, the brokerage house has a constructive outlook on silver, citing multiple tailwinds that continue to sustain the rally even as valuations stretch.
Meanwhile, gold futures on MCX were trading higher by 1.05% at Rs 1,33,860/10 grams. Gold has seen a massive rally in 2025, with reports from late 2025 showing gains of over 75% in the past year, reaching near-record highs of Rs 1.3 lakh per 10 grams, driven by geopolitical tensions, central bank buying, and global economic uncertainty, with analysts projecting further strong performance into 2025-2026.
Axis Mutual Fund has positive outlook for near term gold although higher real yields, a stronger dollar or easing inflation could moderate momentum in 2026 while for silver rally has been led by persistent supply deficit and higher industrial demand from sectors like solar energy, electric vehicles and semiconductors which continue to expand.