Silver sees best annual return in 10 years; holds 45-year trend on charts

Silver prices that hit nearly $44 an ounce (oz) in the international markets and Rs 134,089 per kilogram (kg) back home are up 56 per cent thus far in calendar year 2025 (CY25). This is the highest return that silver has given in the last 10 years (since calendar year 2016). 

 

Silver has also outperformed gold (up around 49 per cent at Rs 113,129 per 10 gram) thus far in CY25. The last time silver prices gave such a phenomenal return was in 2020 when the prices rose 44 per cent in a year to Rs 67,383/kg in the Indian markets, data shows. Gold prices back then had surged 27.9 per cent year-on-year (Y-o-Y) to Rs 50,001/10 gram. 

 

 

Silver’s journey over the past decade, analysts said, tells a compelling story of transformation. During 2010-20, the market experienced weak demand and surplus production, resulting in subdued price action. However, the landscape changed 2021 onwards, triggered by rising industrial demand for the metal. 

 

 

By 2024, the industrial demand hit a record high of 680.5Moz (million ounces), suggests a note from Nomura, contributing to a total demand of 1,164.1Moz against a total supply of just 1,015.1Moz, creating a significant market deficit of 148.9Moz.

 

This structural shift, analysts said, has been primarily driven by three key sectors: renewable energy, EVs, and electronics, with China's aggressive adoption of high-silver-content N-type solar cells leading global demand growth. 

 

The impact of this sustained demand surge, Nomura believes, is evident in the rapid depletion of above-ground inventories, which have declined sharply from 22-months of supply in December 2020 to just 13-months by December 2023.  

 

Adding to its appeal is the current gold-to-silver ratio of 84, suggesting significant undervaluation compared to gold. Typically, the gold-to-silver ratio indicates how many ounces of silver are needed to buy one ounce of gold.  A higher ratio indicates gold is expensive relative to silver, while a lower ratio suggests silver may be undervalued and could be a better investment.

 

Looking ahead to 2025, with demand forecast at 1,148.3Moz against supply of 1,030.6Moz, the silver market, Nomura said, faces its fifth consecutive year of deficit at 117.6Moz. 

 

“Industry projections now suggest a potential exhaustion of known silver reserves by 2050 if this consumption pattern continues. With limited upside potential in gold prices near term, we view silver as increasingly attractive, particularly given its dual role as both an industrial metal and a precious metal hedge against economic uncertainty,” wrote Gareth Nicholson, chief investment officer at head of managed investments at Nomura in a recent note.

 

Chart check

 

While momentum has carried prices higher and could accelerate beyond the critical $50/oz resistance level, analysts believe current technical indicators suggest a potential near-term pullback. These dips, Nomura said, could present attractive entry points for investors looking to capitalize on silver's strong fundamental outlook and its unprecedented 45-year cup and handle formation. Click here for a detailed technical chart

 

Silver, said Mensur Pocinci, an analyst tracking commodities at Julius Baer, remains bullish on the road ahead for silver and expects prices to hit $52 to $58 levels going ahead. 

 

“The next visible target on the charts for silver stands at Rs 150,000/kg, up 12 per cent from the current levels. Silver’s rally is not only about safe-haven demand — it is being redefined as an industrial powerhouse,” said Jahol Prajapati, a research analyst with SAMCO Securities.