Silver Futures today touched a fresh all-time high of ₹ 1,09,635 per KG, showing a continuous rally since the last 3 weeks. This month alone, silver prices on MCX have increased by 13 percent.
Several reasons are there for Silver showing a continuous rally this year, increasing by 26 percent this year. And can silver reach Rs. 1,50,000, and what possible reasons could push the price upwards?
Current Major Geopolitical Situation
In the past week, Israel launched a major military operation targeting Iran’s nuclear and military infrastructure, including strikes on key sites. In response, Iran fired hundreds of missiles and drones at Israeli targets, escalating tensions into the most direct and intense confrontation in decades.
Currently U.S is not involved directly; however, if the tensions further escalate, it could have far-reaching consequences on a global scale, potentially destabilising the broader Middle East.
The recent agreement between the U.S. and China marks a clear easing of tensions between the two countries. Both sides have reduced some of the heavy tariffs, signalling a willingness to cooperate and rebuild trade relations.
What can lead to an increase in Silver Demand?
Ongoing conflicts between Iran-Israel and Russia-Ukraine are likely to boost the demand for silver due to its essential role in military applications. Silver is a key material in weapons systems, communication equipment, and advanced defence technologies.
As global tensions rise and nations increase military spending, the strategic need for silver grows, contributing to a potential surge in its demand. Further, these conflicts can disrupt mining, transportation, and trade routes, potentially leading to supply chain issues.
In times of geopolitical instability and economic uncertainty, silver often acts as a safe haven asset. Investors tend to move their money into precious metals like silver to protect their wealth when markets are volatile or traditional investments become risky.
Further, Other long-term factors driving silver demand include its growing use in advanced technologies such as AI infrastructure, electric vehicles (EVs), and solar panels. Silver’s excellent electrical conductivity makes it essential in these sectors, especially as the world shifts toward cleaner energy and smarter tech.
In summary, the rise in silver prices is being driven by a mix of short-term and long-term factors. Geopolitical conflicts are increasing military demand, while economic uncertainty is boosting silver’s safe-haven appeal.
At the same time, the growing use of EVs, solar panels, and AI infrastructure is strengthening industrial demand for silver. Possible Supply chain concerns add further pressure, making these combined factors likely reasons behind the current and possibly future silver price rally.
Written By Abhishek Das
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