Silver price breaches Rs 1 lakh per kg mark again in physical market

Economic Times

22-05-2025

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Silver prices in the physical market crossed the Rs 1 lakh per kilogram mark once again on Thursday as the retail price of 999-grade silver stood at Rs 98,492 per kg, according to data by the India Bullion and Jewellers Association (IBJA).After including the 3% Goods and Services Tax (GST), the effective price stands at Rs 1,01346.76 per kg, breaching the critical psychological level for the second time this year.The sharp move comes amid growing optimism about silver's potential to catch up with gold in the current precious metals bull cycle. Analysts point to a rare structural mismatch between supply and demand as a key driver.Arihant Bardia, CIO and Founder at Valtrust, noted in a recent article, '2025 will mark the fifth consecutive year of silver deficit,' highlighting that industrial demand is rising, while mining and recycling supplies remain relatively stagnant.'This deficit isn't a temporary aberration – it's become structural,' he added, explaining that the shortfall is creating a bottleneck that appears increasingly unsustainable. Since 2021, silver has experienced annual deficits ranging from 79 million ounces to an estimated 250 million ounces projected for the current year.Bardia also underscored the growing role of silver in green technologies, particularly solar panels, electric vehicles, and electronics, which are now contributing significantly to overall consumption.'This industrial component provides an additional catalyst beyond monetary demand,' he said, noting that technological adoption, especially in emerging economies, is steadily pushing up the demand floor.Also read: Big prediction from Rich Dad Poor Dad author Robert Kiyosaki: Gold will go to $25,000 Adding fuel to the narrative, renowned financial author Robert Kiyosaki — known for his book Rich Dad Poor Dad — issued a bold forecast on social media platform X earlier this week. He wrote, 'Good news. Gold will go to $25,000. Silver to $70. Bitcoin to $500k to $1 million.'His aggressive stance on silver reinforces the sentiment that the white metal, often overshadowed by gold, may be primed for a re-rating.The silver market's tightness and long-term underperformance relative to gold have also brought the gold-to-silver ratio under scrutiny. Historically, a mean of 68:1 is considered equilibrium, but recent levels around 100:1 suggest silver may be undervalued.Therefore, if gold prices hold steady and the ratio reverts to its historical average, Bardia estimates that silver could rise to around Rs 165 per gram, implying upside of nearly 70% from current levels.However, he cautioned against excessive enthusiasm. 'Silver is notoriously volatile,' Bardia warned, advocating for a tactical approach with a portfolio allocation of no more than 5%, clear profit targets, and strict stop-losses.With both structural fundamentals and speculative interest aligning, silver appears to be regaining the attention it once commanded.