Silver beats gold, scorching Rs 11,000 run up in a day; gold at high of Rs 1.27 lakh

Kolkata: Silver prices scaled a new peak of Rs 1.73 lakh per kg on Monday after an unprecedented single-day gain of `11,000 per kg, driven by increasing demand from investors amid a global shortage of the precious metal. With a goods and services tax of 3%, a kg of silver now costs Rs 1,78,190 in the domestic market, according to the India Bullion and Jewellers Association (IBJA).

The metal has appreciated a staggering 57.69% over the past month and surged almost 85% since the beginning of 2025.

Investors seeking stability, tight supplies in global markets and expectations of lower interest rates ahead are key factors responsible for the runaway rise in silver prices, said industry executives and experts. Increasing industrial use in renewable energy, consumer electronics and electric vehicles, among other applications, is also driving demand.

“There is a shortage in silver in the market. Jewellers are scrambling as consumers ask for silver due to the spurt in prices. Silver’s rally is much steeper than that of gold and now consumers want to buy silver in anticipation of this rally continuing further,” said Surendra Mehta, national secretary, IBJA. Silver inventory in London, from where India imports silver, has plunged as demand has increased globally, he said.

Global production of silver is around 25,000 tonnes, with Mexico being the largest producer, followed by China and Peru. Bolivia and Chile are also source countries for silver. “There is a deficit in the supply of silver to the market,” said Chirag Sheth, principal consultant, South Asia, at Metals Focus.


“Moreover, when talk of US tariffs surfaced, a lot of silver was shifted from the vaults of London to New York as the US bullion trade thought silver would turn out to be pricey,” said Sheth of the precious metals research firm. “Now, it is taking time to unlock that silver from the vaults of New York. That is why there is a shortage of the metal in the global markets, which too is driving the prices.”

Besides, since about 75% of the silver available worldwide is produced as a byproduct of zinc, copper and gold, the output of silver cannot easily expand unless there is an increase in the production of these main metals from the existing mines.

“The shortage has also happened as three mines, one each in Chile, Peru and Indonesia, have closed down. The situation can only ease after a month, when new supplies come from the US and China and consumers sell silver in the market for profit-booking,” said Manav Modi, precious metals analyst at Motilal Oswal Financial Services.

Meanwhile, Kotak Mutual Fund, SBI Mutual Fund and UTI Mutual Fund have temporarily suspended investment in silver exchange-traded fund (ETF) of funds to protect the interest of investors due to the shortage of physical silver in India. Tata Mutual Fund, too, announced a temporary halt to investments and switch-ins in the Tata Silver ETF Fund of Fund from Tuesday.

“As there is scarcity of silver, the premium on silver has gone up significantly, leading to a disparity between silver ETF and silver futures prices and prompting mutual fund houses to temporarily halt new investments,” said Modi.

Another safe haven, gold at high of Rs 1.27 lakh
Gold prices rallied by Rs 1,950 to hit a fresh peak of Rs 1,27,950 per 10 gm in the National Capital on Monday, driven by safe-haven demand amid renewed US-China trade tensions. Outlook continues to be bullish, according to traders.