Gold, silver price surge explained: Why bullion prices are rising fast

With gold up over 40 per cent and silver nearing 15 per cent in a year, global volatility, rupee weakness, and industrial demand are propelling India's precious metals boom

Domestic prices of gold and silver have recorded sharp increases over the past three years, with both metals reaching all-time highs in June 2025. Spot prices for gold touched Rs 1,02,055 per 10 grams on Monday (June 16), while silver crossed the Rs 1 lakh mark for the first time this month, closing at Rs 1,09,900 per kg, according to month-end domestic spot price data till June 2025, as charted by Thurro. 

 

Gold prices have witnessed a sustained rally over the past three years, rising to Rs 1,02,055 by June 2025 from Rs 50,730 per 10 grams in June 2022. 

 

> In 2023, prices rose to Rs 63,020 (Dec 2023) from Rs 54,610 (Dec 2022), marking a 15.4 per cent annual rise.

> In the first half of 2024, gold accelerated further, peaking at Rs 79,230 in October before ending the year at Rs 75,830. This represented a 20.3 per cent increase for the year.

> The first six months of 2025 alone saw a further 27.7 per cent jump, from Rs 75,830 in December 2024 to Rs 96,840 in early June 2025.

 

This marks the strongest semi-annual gain in the three-year dataset.

 

Silver crosses Rs 1 lakh per kg for the first time in 2025 

Silver prices moved even more sharply. Silver surged to Rs 1,09,900 per kg on June 16 2025 from Rs 59,080 per kg in June 2022, a jump of nearly 86 per cent.

 

Between December 2022 (Rs 68,030) and December 2023 (Rs 73,270), silver posted a modest 7.7 per cent increase. However, in 2024, silver’s rise steepened, climbing to Rs 85,670 by December 2024 from Rs 73,270 in December 2023, a 16.9 per cent increase. The rally intensified in 2025, with silver adding nearly 22.8 per cent in just the first half of the year. 

Silver reached a new milestone in March 2025, crossing Rs 1,00,000 per kg (Rs 100,690), and in June 2025, the metal touched a record high of Rs 1,09,900. (Chart: Thurro)

 

Silver reached a new milestone in March 2025, crossing Rs 1,00,000 per kg (Rs 100,690), and in June 2025, the metal touched a record high of Rs 1,09,900.

 

Gold-to-silver ratio shows volatility 

The gold-to-silver price ratio, often used to gauge the relative value of the two metals, narrowed during the peak silver rally. In June 2022, the ratio stood at approximately 0.86 (gold Rs 50,730 per 10g vs silver Rs 59,080 per kg). By June 2025, the ratio fell to 0.92, reflecting that while both metals have risen significantly, silver has outpaced gold in 2025.

 

Gold crossed Rs 70,000 for the first time in April 2024 (Rs 71,650). The precious metal peaked at Rs 96,840 in June 2025, with the sharpest monthly rise between March 2025 to April 2025 (+Rs 5,790). 

Gold prices have witnessed a sustained rally over the past three years, rising to Rs 96,840 by June 2025 from Rs 50,730 per 10 grams in June 2022, an increase of 90.9 per cent. (Chart: Thurro)

 

Meanwhile, silver crossed Rs 90,000 in May 2024 (Rs 92,140), and subsequently crossed Rs 1 lakh in March 2025. The sharpest monthly jump came between April 2024 to May 2024 (+Rs 12,120).

 

What is driving the gold and silver surge? 

One reason for the steep domestic surge is the weakening rupee, which dropped to Rs 86 per dollar in 2025 from Rs 79 per dollar in 2023. Since India imports nearly all of its gold and silver, any depreciation inflates local prices, even when global prices remain constant. This currency effect has contributed to India’s domestic gold hitting record highs faster than the global average.

 

Additionally, central banks have added to the frenzy globally. In 2024, over 1,000 tonnes of gold were bought by central banks worldwide for the third year in a row, according to the World Gold Council. The Reserve Bank of India also added to its reserves, increasing institutional demand and tightening global supply.

 

Uncertain geopolitics making gold a safe hedge 

Global uncertainty has made precious metals a preferred hedge. From the collapse of SVB and Credit Suisse in 2023 to the economic policy volatility under President Trump, investors are treating gold as insurance against volatility. International rating agencies’ downgrades of US sovereign debt and trade frictions with China have deepened risk aversion.

 

Every major geopolitical flashpoint, Russia-Ukraine, Red Sea tensions, or US-China tariff battles, has pushed global investors further into gold. This is clearly reflected in the price graph: after stagnating through mid-2024, gold shot up steeply starting November 2024, climbing nearly Rs 9,000 in three months domestically.

 

Silver’s demand driven by industries 

Unlike gold, silver’s fundamentals are driven largely by industrial demand. Roughly two-thirds of global silver use comes from industries like semiconductors, photovoltaics (solar panels), water purification, batteries, and touchscreen displays. The solar PV sector alone is growing at 12 per cent annually, creating secular demand for silver, especially in Asia.

 

This divergence also explains the price lag: while gold surged on financial fear, silver moved gradually but steadily as industrial recovery took hold. Silver’s rise to Rs 91,147 in April 2025 from Rs 76,736 in May 2024 aligns with a broader uptick in manufacturing and green energy expansion globally.

 

Traders eyeing undervalued silver 

A key market signal has also played a role: the gold-silver ratio, a traditional valuation metric, currently stands at over 90:1, meaning one ounce of gold buys more than 90 ounces of silver. The historical average is around 60:1. This implies silver is significantly undervalued relative to gold, encouraging traders to rotate allocations.

 

Retail interest has surged. Gold ETF assets in India rose 82 per cent year-on-year to Rs 62,452.94 crore by June 2025, from a much higher base than silver. Combined with record folios in silver ETFs and pre-budget buying frenzy ahead of anticipated tax hikes, the trend suggests broad-based public participation.

 

Both metals are now trading at historic highs. Retail investors, experts warn, should be cautious. While precious metals offer diversification and inflation protection, overexposure can amplify volatility.