Silver prices may be ready for a strong breakout. Market expert Neal Bhai says the “silver lining” points to a powerful rally, with silver targeting ₹2.40 lakh to ₹2.50 lakh in the coming phase. Here’s what investors should know.
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Silver extended its golden run in 2025 after delivering more than 20% return in 2024. Prices posted their highest yearly gain of more than 100% since 1979.
Silver has broken out of a multi-year consolidation phase, signalling the early stages of a long-term structural uptrend. The monthly chart highlights a massive Rounding Bottom breakout formation stretching from 2011 to 2025. The white metal has broken the neckline resistance at $50 level, and surged to a new all-time high of $64.
Silver Price structure
Silver spent more than a decade forming a broad rounding bottom pattern after the 2011–2013 collapse. The breakout above $50 confirms renewed long-term bullish momentum. The next major resistance sits around $65.50–$68 level.
Silver Moving Averages:
The 20-month and 60-month EMAs are turning higher with a positive slope—classic early-cycle trend confirmation. Price trading well above long-term EMAs reflects strengthening macro momentum.
Silver RSI:
Monthly RSI is approaching overbought levels but remains in a healthy bullish zone. Historically, silver shows extended rallies even when RSI stays elevated—indicating strength, not exhaustion.
Conclusion
Silver has decisively broken out of a decade-long bottoming structure. A sustained monthly close above $67 could trigger a multiyear uptrend targeting $76–$80. Consolidation may occur near resistance around $65, but the overall structure remains strongly bullish in the long term.
As long as $50 level is intact on the downside, we expect prices to trade with a positive bias. Any correction in price can be used as an accumulation opportunity, provided the support zone remains intact.
In the domestic market, any correction down to the Rs 1,70,000-1,78,000 range can be used for staggered accumulation, with the target of around Rs 2,40,000 – 2,50,000 for 2026.
Silver: Fundamentals in Favour
Key Fundamental Drivers are Aligning to Strengthen the Bullish Outlook for Silver
- Silver Breaks Tradition; Gold Correlation Collapses in 2025: The silver market is undergoing a historic repricing event, marked by the decoupling from its traditional correlation with gold. The 2025 rally, driven by the convergence of industrial scarcity and monetary tailwinds, reflects supply/demand fundamentals defined by chronic, structural deficits.
- Silver Market Deficit Set to Persist in 2026: The silver market has remained in deficit since 2021, with a cumulative shortfall of ~700 Moz over the 2021-2025 period. According to Refinitiv (see key Charts section below), the silver market is expected to continue in deficit in 2026, with a projected shortfall exceeding 100 Moz.
The Decoupling of the Gold/Silver Ratio
- Gold/Silver Ratio Collapses Below 70 Amid Market Shifts: A critical development in late 2024 and throughout 2025 has been the collapse of the Gold/Silver Ratio (GSR). Historically serving as a barometer for risk appetite, the ratio has compressed significantly, falling from highs near 105 to current levels below 70.
- Silver Outperforms Gold Amid Industrial and Investment Demand: This compression signals that silver is outperforming gold on a relative basis. Unlike previous cycles in which silver rallied as a “high-beta” version of gold, the current move is idiosyncratic. It is being driven by physical tightness in the wholesale market rather than by purely speculative flows. The divergence suggests that the market is beginning to price silver primarily as a critical industrial input rather than solely as a monetary hedge. The market is now competing for metal on two fronts: industrial users, who need it for solar panels, and investors, who seek it for price appreciation.
Supply/Demand Imbalance
Supply: Structural Inelasticity
As per the Refinitiv Supply/Demand table, the supply side of the equation presents a severe bottleneck.
- Stagnant Production: Global mine output has failed to respond to higher prices, plateauing at roughly 810 Moz, levels that
are effectively unchanged or lower than five years ago. - By-Product Economics: Approximately 70-80% of silver is mined as a by-product of lead, zinc, and copper. This geological
reality makes supply price-inelastic; miners cannot ramp up silver production without crashing the markets for the primary
base metals. - Scrap Limitations: Secondary supply (scrap) has not surged sufficiently to fill the gap, leaving total supply effectively capped
below 1 Bn ounces.
Demand: Strong Industrial Demand
- Industrial demand remains the cornerstone of the bullish thesis. The photovoltaic (PV) sector has fundamentally altered the demand curve.
- The critical takeaway from the demand data is the exponential growth in industrial demand, specifically from the green energy transition. Demand from the Solar Photovoltaic (PV) sector has more than doubled in just four years, from 94.4 Moz in 2020 to 243.7 Moz in 2024. Solar alone accounted for nearly 21% of total demand in 2024, fundamentally altering the metal’s usage profile.
- According to Refinitiv data, silver supply deficits are expected to persist through 2026, estimated at 112 Moz.
Inventory Squeeze - US Tariff Fears Trigger Global Metal Squeeze and COMEX Silver Build: The market is currently grappling with logistical imbalances driven by trade policy uncertainty. Fears of impending US import tariffs have triggered a flight of physical metal toward US markets, sparking a historic “squeeze” in the futures market. Throughout the year, COMEX futures have persistently traded at a premium to London spot prices. This arbitrage opportunity has aggressively pulled metal out of London, the world’s primary liquidity hub, and redirected it to US vaults, effectively draining the global float. Silver inventory at COMEX has been rising.
- The Critical Mineral Risk: The regulatory backdrop remains fragile. The recent addition of silver to the US Geological Survey’s list of critical minerals has amplified speculation regarding potential import tariffs. Such policy measures would likely exacerbate regional premiums and further fracture global supply chains.
Risk to the Elevated Silver Prices - Prices exceeding $60/oz may begin to trigger demand destruction or thrifting/substitution (using less silver per unit) in the industrial sector. Global economic deceleration, specifically a contraction in high-tech manufacturing or electronics, could weigh on silver prices.
Disclaimer
This article is intended for educational purposes only. The views and opinions expressed are those of individual analysts or brokerage firms and do not represent the views of GoldSilverReports.com. Investors are strongly advised to consult certified financial experts before making any investment or trading decisions.
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