Due to supply constraints and global unrest, silver prices surged in 2025, surpassing those of gold. Silver has demonstrated its worth as a dependable investment and hedge against market swings with returns of more than 2,600% since 2000.
Silver, which is frequently overlooked in favor of gold, has quietly served as a reliable hedge for many years. In times of global instability, inflation, and volatility, the white metal has proven extraordinarily robust. Silver prices have produced remarkable long-term returns, and an examination of its historical patterns shows why investors looking for diversification outside of stocks and bonds continue to be drawn to the metal.
If an investor invested ₹1,000 in silver in 2000, it would be worth ₹26,455 now if they continued to do so for a full 25 years.
This indicates that the value increased by more than 26 times, demonstrating the power of long-term investing and silver's capacity to preserve and increase wealth over time.
In 2000, the average price of silver in India was approximately ₹7,900 per kilogram. Silver is currently pricing at about ₹2.16 lakh per kg, giving long-term investors returns of more than 2,600%.
Few people saw silver as a long-term source of wealth at the beginning of the century; instead, it was mostly seen as an industrial metal with cyclical demand. But as time has gone on, Silver's performance has amply disproved that notion.
Using silver as a hedge during market cycles
Like gold, silver has been a potent inflation and volatility hedge for almost forty years. Silver helped reduce volatility in years when domestic stocks produced negative returns, according to historical study.
Silver remained relevant as a store of value even while equities markets saw several boom-and-bust cycles, including the dot-com catastrophe, the global financial crisis, pandemic-led instability, and recent geopolitical disturbances.
Similar to gold, silver has additional important features in addition to being a safe haven. It is essential to the clean energy transition, applications like photovoltaics and electric vehicles, and transformative forces like the AI boom and the expansion of data centers. In light of growing military spending, silver is also essential to defense initiatives. As a result, it is anticipated that demand for silver will remain high in 2026 along with an increase in demand for retail investments. Therefore, while the U.S. government identified silver as a key commodity, increasing strategic significance to the metal, a severe supply constraint that began in October may continue to pinch world markets. According to a recent analysis from Yes Bank, "Chinese inventories have also fallen to decade lows and are aiding the silver price surge."
Significantly, silver has produced enormous long-term returns in addition to cushioning portfolios during volatile times, highlighting its significance in multi-asset strategies.
The price of silver reached a record high.
In 2025, silver reached previously unheard-of heights, indicating a robust recovery for the precious metal. During intraday trading on Tuesday, December 23, spot silver reached $70.0055 per ounce, surpassing the $70 threshold for the first time ever. Positive international indicators, escalating geopolitical tensions between the US and Venezuela, and weakness in the dollar index all contributed to the dramatic shift.
Silver prices also reached all-time highs back home. Due to strong investor purchasing enthusiasm, MCX silver increased 1.7% to a record high of ₹2,16,596 per kilogram. Gold rose in unison, with MCX gold February futures rising 1.1% to a record high of ₹1,38,300 per 10 grams, demonstrating the precious metals' general resilience.
In 2025, silver has performed better than gold. In contrast to the 76% increase in gold on the spot market during the same period, silver prices have increased by 140% so far this year. Investor interest in silver has returned as a result of this dramatic increase in the metal's performance.
Why is silver on the rise?
Silver's climb this year has been fueled by a number of causes. Demand for gold and silver, two precious metals, increased due to heightened tensions between the US and Venezuela, predictions of additional interest rate reduction in the US, and a weakening dollar.
Furthermore, supply-side issues have been crucial to silver's surge. There are severe supply constraints as a result of mining activity disruptions and the scarcity of current inventory. These restrictions, along with constantly increasing industrial demand, have restricted the market and caused silver prices to rise dramatically.
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