Silver Prices Surge 161% in 2025, Tata Mutual Fund Maintains Bullish Outlook for 2026
Silver achieved remarkable 161% gains in 2025, hitting an all-time high of $86.62 per ounce before retreating to $72 per ounce in early 2026. Tata Mutual Fund attributes the rally to industrial demand representing 50% of consumption, supply constraints from by-product mining, and strong investment interest. The global market faces a fifth consecutive year of structural deficit with demand at 1.24 billion ounces against supply of 813 million ounces. India drove significant demand with 170+ million ounces imported in ten months. Despite maintaining long-term bullish outlook, Tata Mutual Fund recommends staggered investments via SIPs to manage volatility.
*this image is generated using AI for illustrative purposes only.
Silver delivered exceptional returns in 2025, recording a historic surge of nearly 161% according to Tata Mutual Fund. The precious metal reached an all-time high of $86.62 per ounce on December 29, 2025, before retracing to $72 per ounce at the start of 2026 due to profit booking and CME margin hikes.
Key Drivers Behind Silver's Rally
Tata Mutual Fund identifies three primary factors driving silver's exceptional performance:
| Factor | Details |
|---|---|
| Industrial Demand | Accounts for roughly 50% of global silver consumption |
| Key Industries | Solar panels, electronics, electric vehicles |
| Supply Constraints | Silver mostly mined as by-product, limiting scalability |
| China Export Rules | New licensing requirements for large producers |
| Investment Interest | Strong ETF and retail investor buying |
Industrial consumption represents approximately 50% of global silver demand, with significant usage in solar panels, electronics, and electric vehicles. This industrial component provides fundamental support to silver prices beyond traditional precious metal investment demand.
Supply limitations create structural challenges for the market. Since silver is predominantly mined as a by-product of other metals, global supply cannot easily scale to meet rising demand. China's new export rules requiring licenses only for large producers could potentially widen the global deficit from 2,500 tonnes to over 5,000 tonnes per year.
Market Fundamentals and Global Demand
The silver market faces a significant supply-demand imbalance that has persisted for multiple years:
| Metric | 2025 Figures |
|---|---|
| Mined Silver Supply | 813 million ounces |
| Total Demand | 1.24 billion ounces |
| Market Deficit | Fifth consecutive year |
| Inventory Status | Multi-year lows in London, China, US |
Globally, mined silver supply in 2025 was estimated at 813 million ounces, while total demand including industrial and investment applications reached approximately 1.24 billion ounces. This creates a structural deficit that has continued for the fifth consecutive year, supporting price appreciation.
India emerged as a major demand driver, importing over 170 million ounces in the first ten months of 2025. The country experienced a particularly strong surge of 2,600+ tonnes during September-October, highlighting robust retail and industrial demand in the domestic market.
Investment Outlook and Strategy
Tata Mutual Fund maintains a cautiously optimistic view on silver's prospects. The fund believes silver may continue its long-term bullish trend due to its dual role as both a precious and industrial metal. However, short-term price corrections remain possible due to profit booking, portfolio rebalancing, and potential demand-supply revisions in 2026.
Given silver's inherent volatility, Tata Mutual Fund recommends investors consider staggered investments or systematic investment plans (SIPs) rather than lump-sum purchases. This approach can help reduce risk while providing exposure to potential upside opportunities.
Investment Options and Risk Considerations
Investors seeking silver exposure have several options:
- Mutual funds and ETFs focused on precious metals provide indirect access
- Systematic investment plans help manage volatility through rupee-cost averaging
- Global factor monitoring including supply shortages, geopolitical developments, and central bank policies
Investors should carefully review scheme documents as mutual fund investments remain subject to market risks. Key factors to monitor include supply shortages, geopolitical developments, central bank policies, and interest rate expectations.
Comparative Performance
Silver significantly outperformed other commodities and asset classes in 2025:
| Asset Class | 2025 Performance |
|---|---|
| Silver | ~161% |
| Platinum | ~135% |
| Palladium | ~72% |
| Gold | ~66% |
| Copper | ~44% |
Silver's 161% gain exceeded platinum's 135% rise, palladium's 72% increase, gold's 66% appreciation, and copper's 44% advance. The metal also outpaced major stock indices and cryptocurrencies, reflecting strong investor demand for alternative assets during the period.
16
