Silver prices surge: Top reasons and what to expect

Silver prices have been on a run in the last few weeks, rising from around $29.5 an ounce (oz) to $36.6/oz. This 24 per cent rise from March 2025 levels has outpaced the run in gold prices, which climbed nearly 15 per cent during this period to $3,338/oz.

The recent strength in silver prices, analysts at HDFC Mutual Fund wrote in a note, can be partly explained by investors positioning for the ratio to normalize after silver’s prolonged underperformance, besides strong demand from the user industries.

In the last one year, silver prices have moved up 26.24 per cent, underperforming the run in gold prices that gained nearly 45 per cent during this period, data shows.

Gold-Silver ratio ranged around and crossed 100 in May 2025, showing significant undervaluation of silver relative to Gold. The ratio, which indicates how many grams of silver one can buy for one gram of gold, had crossed 100 only once in this century, during the Covid-19 pandemic when silver corrected sharply amid disrupted industrial activity.

A higher Gold – Silver ratio indicates silver is cheaper, and investors typically use it to diversify the amount of precious metals that they hold in their portfolio. As on 9 June 2025, the ratio stood at 91.53, higher than the 10-year average of 81, analysts said.

Demand for silver

Usage-wise, silver has a 52 per cent demand from industrial applications, and one of the biggest demand growth driver is its use in clean energy applications such as solar energy and electric vehicles (EVs). Jewellery(at 18 per cent) and physical investment, coins & bars (21 per cent) were some of the other demand drivers for silver in the last 10 years (from 2015-2024).

Solar sector demand

As per estimates in the World Silver Survey 2025, silver industrial demand rose 4 per cent in 2024 to 681 million ounces (Moz), reaching a new record high for the fourth consecutive year. Clean energy requirements such as investment in grid infrastructure, vehicle electrification, and solar applications were key drivers. AI is another driver for silver demand, as consumer electronics shipments increased.

Analysts at Silver Institute and BofA Global Research see silver demand for solar energy generation hitting 7,488 tons between 2025 and 2029, rising from 5,671 tons in 2024, and substantially higher than the average demand of 2,489 tons between 2015 and 2024.

Jewellery, silverware and investment demand could see varying levels of demand going ahead amid firm prices, analysts said. Global policies around clean energy and outlook for global trade, in this backdrop, assume relevance in estimating long-term demand for silver.

“Solar and EV-related demand has been a key driver for silver, and most economies have taken a strong view towards continued growth in adoption of these technologies. Risks to global growth outlook from tariff related uncertainties translate to risks to silver demand,” the HDFC Mutual Fund note said.

Where are silver prices headed?

On the technical charts, a rare ‘Cup and Handle’ pattern is forming not just on the weekly chart, but also on the multi-decade (yearly) chart, said Apurva Sheth, head of market perspectives & research at SAMCO Securities, signaling a powerful fractal setup in motion.

“The $35 level now stands out as a crucial breakout zone. A sustained close above this mark could clear the path towards all-time highs, potentially targeting the psychological $50 zone seen during silver’s last euphoric run in 2011,” Sheth said.

G Chokkalingam, founder and head of research at Equinomics Research, too, sees a robust demand from the user industries continuing in the months ahead, which is likely to keep silver prices firm.

“Demand for silver from solar and EV industries is likely to stay firm going ahead. I expect silver prices to rise 20 per cent easily from here on in the next 6 – 12 months,” he said.

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