Silver prices surge as market anticipates record-breaking rally
The ratio had made an all-time high of 126.55 in March 2020, from where silver prices had doubled by August.
Silver is poised for a potential record-breaking surge, surpassing $36 per ounce for the first time in 13 years, driven by technical strength and a weakening dollar. Analysts anticipate silver outperforming gold, potentially reaching $50 by year-end. Favorable technical patterns and expectations of easing trade tensions further fuel the bullish outlook for the white metal.
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Mumbai: Silver may be on the cusp of a record-breaking rally after having topped the $36 per ounce mark in international markets for the first time in 13 years late last week. With technical charts pointing to continued strength and a weaker dollar boosting demand for hard assets, analysts expect the white metal to play catch-up rally with gold soon.Silver prices were trading at $36.3 per ounce on Monday, up 0.9% on the international market. In India, it was trading at ₹1,05,520 per kilogram on MCX."With gold likely to consolidate after a strong run, silver has the potential to outperform," said Ritesh Jain, founder, Pinetree Macro. "If silver holds above $36, it could retest the $50 highs seen during the Hunt Brothers era by the end of this year."In 2025, international gold prices have gone up 43.7%, fuelled by growing demand for safe-haven assets in the wake of Donald Trump's tariff actions and geopolitical uncertainties. Silver has rallied 22.3%. In comparision, the equity benchmark Nifty 50 has gone up 5.7%, Nifty Midcap 150 has advanced 3.6% and Smallcap 250 index has declined 1.3%.Silver is known for its short and swift run-ups. In 17 instances since 2005 when it has made a fresh high, the average three-month, six-month and one-year returns thereafter have been 5.2%, 13.3% and 26.1%, respectively, according to Samco Securities.On the technical charts, silver is pointing to a breakout. Apurva Sheth, head of research at Samco Securities, said a rare 'Cup and Handle' pattern is forming not just on the weekly chart, but also on the multi-decade (yearly) chart."This technical formation is often a precursor to explosive breakouts. What makes this instance remarkable is its repetition across timeframes, hinting at deep market structure alignment," said Sheth.Investors and traders could bet on the white metal by buying Silver Exchange-traded Funds, Silver Fund of Funds, or by trading in Silver futures on MCX.Expectations of a sharp rally in silver have been driven by factors such as softening US dollar, renewed hopes of easing trade tensions between the US and Chinese presidents, and the European Central Bank's seventh consecutive rate cut, said Ramesh Varakhedkar, head commodities at ICICI Securities.He said silver's dual role as both a financial asset and an industrial input makes its current rally particularly significant.Currently, the gold to silver ratio - a measure of how many ounces of silver it takes to buy one ounce of gold - stood at 91.3 on Monday, the lowest since April 2, said Varakhedkar. The gauge, which compares the prices of gold and silver, is signalling that silver offers better value at the juncture. The ratio had made an all-time high of 126.55 in March 2020, from where silver prices had doubled by August."In the short-term, silver could rise further to around $37.2, and on the MCX, Silver July contract, short-term price range is expected between ₹102,400 and ₹108,200 per kilogram, provided it maintains above ₹102,400 (currently at ₹1,05,520)," said Varakhedkar.
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