Silver has become 2025’s most profitable investment, with silver exchange-traded fund (ETF)s yielding impressive 102% returns this calendar year. The industrial metal’s value has reached unprecedented levels, trading at approximately Rs 1.8 lakh in the spot market, with analysts forecasting targets up to Rs 2.46 lakh per kg, driven by increased demand and limited supply.Traditional investments have underperformed significantly. Gold ETFs delivered 63% returns, while the Sensex and Nifty showed modest gains of 6-7%.International markets saw silver reach $53.60 on Tuesday, with MCX Silver December futures achieving Rs 162,700 this week. The physical market faces severe constraints, with spot prices at a premium amidst shortages. ETF prices are elevated as market makers struggle with limited inventory and concerns about LBMA-certified silver bar availability.“Unlike previous speculative spikes (1980, 2011), the 2025 surge is fundamentally underpinned by irreversible, material demand from the green energy transition and expanding technology sectors (EVs, Solar, 5G),” Motilal Oswal analysts said, as quoted by Economic Times. “This fundamental support suggests that breaking $50 is not merely a technical event but a necessary repricing mechanism to balance global demand with constrained supply, thereby establishing a new, higher baseline for the metal going forward,” they added.Also read: Gold prices reaches record high; touches Rs 1,27,500 per 10 gramsMotilal Oswal anticipates stabilisation around $50-55 in coming months, with potential highs of $75 per ounce by 2026 and progression towards $77 per ounce in 2027 on COMEX. With USDINR projected at 90, domestic prices could reach Rs 2,40,000 by 2026-end and Rs 2,46,000 subsequently.Bank of America has increased its silver projection to $65 an ounce, averaging $56.25, despite expecting 11% lower demand next year. The bank notes ongoing supply shortages, with the Silver Institute indicating a fifth consecutive year of market deficit.The 2025 silver market deficit is expected to reach 118 million ounces, marking the fifth successive year of structural imbalance, highlighting silver’s importance in green technology.Industrial demand is set to increase by 3% in 2025, reaching new heights due to green economy applications. Silver’s versatility in solar panels and batteries establishes it as a crucial component in renewable energy advancement.Supply limitations are inherent, with 70% of silver produced as a by-product of other metal mining operations. Production depends on these metals’ economics rather than silver prices. Analysts suggest supply-demand equilibrium might not occur until 2028, despite higher prices.“While momentum has carried prices higher and could accelerate beyond the critical $50/oz resistance level, current technical indicators suggest a potential near-term pullback,” Nomura said. “These dips could present attractive entry points for investors looking to capitalise on silver’s strong fundamental outlook and its unprecedented 45-year cup and handle formation.”