DBT Bureau
Pune, 23 Sep 2026
As Diwali approaches, silver deserves a fresh look. Persistent supply deficits, resilient investment demand and a developing technical base support a constructive outlook, while interest rates, substitution and volatility remain the challenges to watch, according to report by Kedia Advisory.
Following a substantial correction, the current phase could offer an opportunity for investors with a medium-term horizon and sufficient risk capacity to begin adding silver gradually. The outlook sees silver at $85–90 per ounce over six months and potentially reaching $120 by Diwali 2027. The conditional domestic objective is ₹4 lakh per kg, subject to the rupee, duties and premiums.
The global silver market is projected to record a 46.3 million ounce deficit in 2026, compared with a 40.3 million ounce shortfall in 2025. This would mark the sixth consecutive annual supply deficit. Mine production is forecast at 844.1 million ounces in 2026, slightly below 846.6 million ounces in 2025.
Silver supply is also slow to respond to higher prices. Only around one-quarter of global output comes from primary silver mines, while most production is generated as a by-product of lead-zinc, copper and gold mining. This limits the pace at which new supply can enter the market.
Investment demand has remained firm in India. Silver ETFs recorded net inflows of around ₹1,271 crore in August 2026, while assets under management reached approximately ₹85,488 crore. The Sprott Physical Silver Trust held around 215.61 million ounces at the end of June, up about 4.90 million ounces from December 2025.
Physical investment is also expected to strengthen, with global coin fabrication and net bar purchases forecast to rise 18% year-on-year to 257.6 million ounces in 2026. EV sales and continued solar capacity additions are additional sources of industrial demand.
Technically, a cup-and-handle base is developing, with sustained closes above $70 and the 200-day moving average near $72.70 identified as key confirmation levels. A break below $62–63 could weaken the setup.
Key risks include tighter monetary policy, substitution and lower silver intensity, stronger mine and recycling supply, higher physical liquidity and a reversal in investment flows.
For domestic prices, $120 silver could translate to around ₹4 lakh per kg at ₹95 per dollar and about ₹4.25 lakh per kg at ₹100 per dollar. These are illustrative exchange-rate assumptions rather than forecasts.
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