The rally in silver, too - silver ETFs up by more than 80%, this year

Along with gold prices, silver prices have also risen sharply in the past some time. In the past one year, price of silver in the global market has increased from around $33.84 per ounce to around $51 per ounce now. This is a gain of around 54% in the period. Silver prices started rising quite steeply since May 2025. This was when US President Donald Trump start imposing higher tariffs on goods from other countries. Global economic risk increased then, and so did the price of silver.

Like gold, silver too is a safe haven asset. It can be used as a hedge against inflation. But usually gold is preferred more as a safe haven asset than silver. Demand for silver also comes from industrial uses. It is used as a raw material for manufacturing of solar panels. With spread of solar power, its demand has gone up, especially from China. China is a major manufacturer of solar panels. ‘

Gold and silver prices usually have a positive correlation

Gold and silver prices usually have a very strong positive correlation. This correlation has been broken in some years, such as after the 2008 financial crisis. Then gold prices had shot up, leaving silver prices behind. Right now the positive correlation between gold and silver prices is holding up strongly. Gold prices have also increased by around 53.3% in the past one year in the global market.

When gold and silver prices are moving in line, then large investors can invest in silver with a smaller marginal loan and get the same return as gold.

Trade war escalates after additional 100% tariff on China

US President Donald Trump on Friday announced additional 100% tariff on Chinese goods coming to USA. This in retaliation to China restricting its export of rare earth minerals to USA. This additional tariff will come into force from November 1st. The risk of the global trade war escalating further has increased after this. Stock markets, globally, crashed after this announcement of President Trump. Nasdaq fell by more than 3% in a day, on Friday. So demand for silver and gold may go up further. This may cause further increase in their prices instead of a retreat from the current peaks.

Both gold and silver prices have risen more in the Indian market than in the global market in the past one year. Gold prices have risen by 60.75% in the past one year. Silver prices have increased by 69.85% in this period. A large part of this higher increase in gold and silver prices in India is because of the depreciation of rupee against the dollar. Rupee has depreciated against the dollar by more than 5% in the past one year. It is the worst performing Asian currency, against the dollar, in this period. Gold and silver prices in India, in rupee terms, are determined by converting their prices in dollar to rupee at the prevailing exchange rate.

And the silver ETFs have risen even more

Year-to-date in 2025, silver ETFs in India have risen by more than 80%. The price of spot silver has increased by 69.85% in India in this period. Usually, silver ETFs should give the same return as spot silver. But the demand for ETFs has shot up so much – in the expectation that silver prices will gain more in the near future – that their prices have outpaced the increase in price of silver.

With the Diwali season going on, and Dhanteras next week, demand for silver may be even more in India than in rest of the world.

Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.