When Will the Silver Price Decrease?

When the price of silver scaled Rs 100,000 per kg back in June 2025, it made headlines... and rightly so. It was big news after all.

But if you told someone back then that the price would double in a few months, no one would have believed you.

But here we are in October 2025 and silver is close to Rs 190,000 per kg at the time of writing. The price is scaling new record highs almost every day.

The sharp run up in silver has grabbed media headlines and triggered discussions about the next direction of prices. Will the bull market continue or will the silver price fall?

In this editorial, we will discuss the price of silver and its prospects going forward.

#1 Best of Both Worlds

Global markets are more concerned about geopolitics than ever before.

The Middle East, Ukraine, India-Pakistan, and potentially, Taiwan are well-known flashpoints. Recent developments have added Thailand-Cambodia and Venezuela to the list.

Military tensions tends to send the prices of precious metals soaring. This time has been no different.

Precious metals have a safe haven appeal to them, gold more than silver.

However, as long as wars do not escalate and global trade isn't affected, economic activity will hold up. This is important for the price of silver as it's an industrial metal as well as a safe haven asset.

Thus, silver is currently enjoying the best of both worlds - safe haven buying and industrial demand holding up. This scenario will be true as long as a major war doesn't disrupt global trade.

#2 Sticky Inflation in the US

The sticky nature of inflation in the US is also supporting prices of precious metals including silver.

Financial markets have come to accept the persistent nature of inflation. This has caused a rise in interest for investments like gold and silver.

The spending bill passed in the US a few months ago will add fuel to the inflation fire as the Trump administration attempts to boost economic growth.

Precious metals have historically acted as a hedge against inflation and this is what we are seeing this time as well.

#3 Market Sentiment About Industrial Demand

There was widespread fear in global markets a few months ago that Trump's tariffs would send the world into a recession.

But these fears proved to be wrong. The US has signed trade deals with many countries.

India and China have been exceptions to this of course. But the US is still negotiating with both countries in spite of imposing high tariffs.

Thus, financial markets believe that the US will eventually sign trade deals with both India and China as well. This has boosted confidence in the markets that a recession in the US can be avoided in 2026.

This in turn will keep demand for commodities stable. Silver being a very important industrial commodity has benefitted from this sentiment.

Industrial demand for silver, especially in emerging sectors like electric vehicles (EVs), renewable energy, and 5G technology, Internet of Things (IoT), among others, is expected to increase, supporting a long-term bullish outlook on silver prices.

#4 Rate Cuts Ahead

The US central bank, the US Fed, has indicated in its recent policy meeting that it could cut interest rates in the near future, if inflation fell and risks to US economic growth increased.

Lower interest rates are positive for assets that don't pay interest like commodities.

Silver, as an industrial metal, is especially sensitive to interest rates because lower interest rates tend to stimulate economic activity.

Higher economic growth leads to higher demand for commodities in general, including silver.

#5 The 'Risk On' Trade

Financial markets swing between risk-on and risk-off in terms of sentiment. These terms indicate bullish and bearish sentiment respectively among investors.

Silver tends to outperform in a 'risk on' environment.

Global financial markets have been in a risk on phase ever since mid-April 2025, when it became clear that Trump wasn't going to impose wide-ranging tariffs on the world and instead would sign bilateral trade deals.

The recent indication giver by the US Fed of cutting interest rates have only added fuel to the fire in this regard.

Either rightly or wrongly, the markets believe economic conditions are bullish for risky assets like stocks, cryptos, and commodities like silver.

Until this sentiment changes, the silver price could maintain its upward trend.

#6 Speculation

And then there is good old-fashioned speculation.

Most traders who are betting on silver aren't doing so because of any fundamental reasons. They're bullish on the white metal because they think its price will go up further.

In other words, silver prices are rising because traders think it will rise or should rise. Their speculative bets are driving the price of silver higher.

This is a highly risky activity best suited to professional traders. Retail traders/investors should ideally refrain from this activity.

Can the Silver Price Fall?

The simple answer is yes.

Silver has a long history of sharp up moves and equally sharp declines.

Now, in the short term, the price of silver does look bullish.

However, investments in silver for the long term are best made either when the price is falling or in a slump. Long-term investors would do well to remember this.

When Will the Silver Price Decrease?

Beyond the short term, the price outlook for the white metal not clear.

It's important to note that speculative run ups in price are likely to end in a crash. This happens to the silver price regularly.

In fact, the biggest declines in silver have always followed the biggest run ups. This happened in 2011 and again in 2021.

Gold is more stable when it comes to price volatility, but silver can move sharply in either direction. Keep this in mind if the recent run up in price has tempted you to trade in silver.

Having said this, the long-term fundamentals of silver are undoubtedly strong.

The point we are making here is that most people who are considering buying silver now are not thinking about the long term. They are thinking of making a quick profit.

And this is where the risks come into play.

The price of silver can fall at any time without any warning. And when it does, leveraged traders in the futures market will face the brunt of the pain.

Conclusion

It makes sense for retail investors to hold some silver in a long-term portfolio but it doesn't make much sense to speculate on short-term price movements.

Also, while considering an investment in silver look beyond 2025 or 2026. Just because the price of silver is going up right now, doesn't automatically make silver a great short-term investment.

The long-term fundamentals of silver are strong but it's a volatile asset. It's not everyone's cup of tea.

Do your due diligence.

If you're interested in adding silver to your investment portfolio, this editorial will be helpful: How to Invest in Silver in India.

Also check out Equitymaster's YouTube playlist on silver.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Happy investing.

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