Tata Mutual Fund attributes the rally to a combination of strong industrial demand, limited supply, and investor interest:
- Industrial demand: Roughly 50% of global silver consumption comes from industries, including solar panels, electronics, and electric vehicles.
- Supply constraints: Silver is mostly mined as a by-product of other metals, limiting the ability of global supply to scale. China’s new export rules—requiring licenses only for large producers—could widen the global deficit from 2,500 to over 5,000 tonnes per year.
- Investment demand: ETFs and retail investors have fueled buying, while inventories in London, China, and the U.S. fell to multi-year lows.
Globally, mined silver supply in 2025 was estimated at 813 million ounces, while total demand—including industrial and investment—was around 1.24 billion ounces, creating a structural deficit for the fifth consecutive year.
India emerged as a major driver, importing over 170 million ounces in the first ten months, with a surge of 2,600+ tonnes in September-October, highlighting robust retail and industrial demand.Tata Mutual Fund’s investment view
Silver may continue its long-term bullish trend due to its dual role as a precious and industrial metal, but short-term price corrections are possible due to profit booking, portfolio rebalancing, and demand-supply revisions in 2026.
The fund recommends investors consider staggered investments or SIPs rather than lump-sum purchases, given silver’s volatile price movements. This approach can reduce risk while providing exposure to the potential upside.
How to invest in silver
- Mutual funds/ETFs: Investors can access silver indirectly through schemes focused on precious metals.
- Understand risk: Review scheme documents carefully, as mutual fund investments are subject to market risks.
- Monitor global factors: Supply shortages, geopolitical developments, central bank policies, and interest rate expectations can influence prices.
- Staggered investment approach: Spread out purchases over time via SIPs to manage volatility.
Global context
Silver outperformed other precious and base metals in 2025, rising ~161%, compared with platinum (~135%), palladium (~72%), gold (~66%), and copper (~44%). It also outpaced major stock indices and cryptocurrencies, reflecting strong investor demand for alternative assets.