23-12-2025

Executive Summary Silver prices saw a strong rally and moved above the $69 per ounce level, marking a fresh high. The move is being supported by growing expectations that the US Federal Reserve will continue to lower interest rates, as inflation is easing and the labor market is showing signs of cooling. A lower interest-rate environment generally benefits precious metals, including silver.

Apart from this, rising global tensions are pushing investors toward safe-haven assets. Recent developments involving US sanctions on Venezuela and geopolitical risks linked to Russia and Ukraine have added to positive sentiment. On the demand side, silver continues to benefit from steady industrial usage, especially from solar power, electric vehicles, and data-center expansion, which keeps the medium-to-long-term outlook constructive.

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Macroeconomic Analysis

1.Interest Rates & Monetary Policy: Expectations of interest rate cuts by major central banks, especially the US Federal Reserve, support silver prices as lower rates reduce the opportunity cost of holding non-yielding assets.

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2. US Dollar Movement: The US dollar is another key macro driver for silver. Periods of dollar weakness generally benefit silver prices, as the metal becomes cheaper for non-US buyers. Any shift toward a weaker dollar due to policy easing or fiscal pressures can further enhance silver’s upside potential.

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3. Increase in Industrial demand: Silver continues to see strong industrial demand due to its extensive use in solar panels, electric vehicles, electronics, and data-center infrastructure. The global push toward renewable energy and digitalization is structurally increasing silver consumption, providing long-term support to prices even during periods of economic uncertainty.

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5. Geopolitics & Policy Actions: Silver prices are being supported by rising geopolitical risks, including the Russia–Ukraine conflict, U.S.–Venezuela tensions, and Middle East instability affecting key trade routes. Longterm supply concerns, driven by silver’s inclusion in the U.S. critical minerals list and China’s planned export controls from 2026, are also boosting investor demand.

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Demand Side Dynamics

Silver demand remains structurally strong due to its critical role across key industrial applications, reinforcing its dual identity as both a precious and industrial metal. Industrial demand, accounting for over half of global consumption, continues to be the primary growth engine, driven by rapid expansion in solar photovoltaic installations, where silver’s superior electrical conductivity is essential. Ongoing global decarbonization efforts, supportive government policies, and accelerating renewable energy capacity additions are expected to sustain elevated demand over the medium to long term.

In parallel, steady growth in electronics, semiconductors, 5G infrastructure, data centers, and electric vehicles where silver intensity is significantly higher provides a durable base for consumption From a macro perspective, while global economic growth remains uneven, with slower momentum in developed markets offset by emerging market resilience, silver’s exposure to strategic, non-discretionary sectors such as energy transition, electrification, and digital infrastructure enhances demand stability

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Supply Side Dynamics

China has emerged as a major hub for silver bar casting machines, supported by its strong manufacturing infrastructure, advanced metallurgical capabilities, and cost-efficient production. Chinese suppliers offer a wide range of solutions, including vacuum ingot casting, induction melting, and continuous casting systems, which are widely adopted by refineries, bullion producers, and jewelry manufacturers due to their efficiency and scalability.

This growing dominance highlights China’s strategic role not only as a major silver consumer but also as a key provider of processing infrastructure within the global silver value chain. As silver demand rises across investment, industrial, and green energy applications, dependence on Chinese casting technology is set to increase, raising longer-term considerations around supplychain concentration, technology diversification, and geopolitical risk.

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U.S Economic Data

Preliminary GDP q/q: Stronger-than-expected GDP is generally bearish for silver as it supports higher interest rates and a stronger USD. Weaker GDP increases rate-cut expectations and is bullish for silver.

Unemployment Claims: Lower-than-expected claims signal a strong labor market, supporting higher rates and are negative for silver. Higher claims suggest economic slowdown and easing policy expectations, which is positive for silver.

Overall, silver’s reaction to U.S. economic data is primarily driven by interest rate and U.S. dollar expectations. Strong GDP growth and a resilient labor market tend to pressure silver by reinforcing a higher-for-longer rate outlook, while weaker growth or rising unemployment supports silver through increased rate-cut expectations and safe-haven demand. Durable Goods Orders have a more mixed impact, as stronger manufacturing activity can support silver’s industrial demand, though this effect is often secondary to broader monetary policy signals.

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RBI Allows Loans Against Silver Jewellery: Unlocking Household Wealth

RBI’s decision to allow loans against silver jewellery could help unlock idle household wealth in India, particularly in rural and semi-urban areas, by reducing reliance on informal money lenders and improving financial inclusion. However, higher price volatility, lack of standardization, and potentially higher interest rates may limit silver loans largely to short-term funding, making effective implementation and awareness crucial to ensure the reform supports households without creating new credit risks. If executed well, the move could gradually formalize silver as a financial asset alongside gold, expanding credit access for underserved segments. At the same time, robust valuation norms and risk controls will be essential to prevent over-leveraging and protect both borrowers and lenders

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Investment Demand and ETF Market Dynamics

Silver exchange-traded funds (ETFs) recorded exceptional growth globally and in India in 2025, driven by a powerful combination of industrial demand, technological adoption, and supply constraints. Globally, silver prices surged from around $28.90 per ounce in January to over $69 by December, reflecting a year-to-date gain of approximately 137%, largely supported by rising consumption in AI hardware, semiconductors, solar energy, and electric vehicles. This sharp price appreciation translated into strong ETF performance, with leveraged products such as ProShares Ultra Silver (AGQ) delivering around 272% returns, while physically backed ETFs including iShares Silver Trust (SLV) and Sprott Physical Silver Trust (PSLV) posted gains of about 113% and 129%, respectively.

In India, silver ETFs witnessed an unusual spike in volumes and prices, driven primarily by a domestic physical supply squeeze rather than global price movements, as highlighted by a Mirae Asset research note. Average daily trading volumes jumped from ₹77.5 crore in 2024 to over ₹211 crore in 2025, with September volumes peaking near ₹642 crore per day, alongside net inflows of roughly ₹5,700 crore in the three months ended August. Limited availability of LBMAcertified physical silver pushed ETF prices 5–10% above their NAV, reinforcing silver’s dual role as an industrial and investment asset. As industrial applications continue to expand amid tight domestic supply, silver ETFs are likely to remain highly sensitive to both global and local market dynamics, offering strong opportunities alongside elevated volatility.

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Technical Outlook:

Silver Spot/ XAGUSD: Silver spot prices are trading within a rising channel, reflecting a strong bullish trend. The ongoing pullback appears corrective and is nearing a key demand zone at $66-$66.50, aligning with prior breakout levels and channel support, making it an attractive buy-on-dip area. The structure resembles a bullish flag / ascending channel continuation pattern, keeping the broader uptrend intact. A healthy buying level can be near support of $66, a sustained hold above this zone could open upside targets at $74.00, followed by $76.00, with a stop loss of $64.

MCX SILVER: On the MCX, a similar structure is visible. Buying can be considered around ₹2,08,000, with a stop loss below ₹2,00,000. If prices sustain above this support, upside targets of ₹2,24,000– ₹2,25,000 can be anticipated, in line with the prevailing bullish trend.

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