Silver Prices Make History: A New Record High
Silver prices have risen above $90 an ounce for the first time ever, marking a significant milestone in the precious metals market. This surge comes as weaker-than-expected US inflation data supports the case for more interest rate cuts, while the geopolitical situation remains tense.
Spot silver rose over 3% to cross the record $90/oz level, outshining gold in the process. The strong start to 2026 is a continuation of the blistering rallies seen last year, with the prospect of a criminal indictment against Federal Reserve Chair Jerome Powell reviving worries about the monetary authority’s independence.
Precious Metals Rally: A Global Phenomenon
Precious metals have made a strong start to 2026, with silver and gold leading the charge. The rally is driven by a combination of factors, including weaker-than-expected US inflation data, a tense geopolitical situation, and concerns about the independence of central banks.
According to a Central Bank Independence report, the prospect of a criminal indictment against Federal Reserve Chair Jerome Powell has revived worries about the monetary authority’s independence. Central bankers across the world have rallied behind Powell, with JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon saying that the political intervention could backfire.
Silver Outshines Gold: A Supply and Demand Story
Silver outshone gold last year, soaring nearly 150% amid an October short squeeze and ongoing supply constraints in London. On the MCX, silver prices climbed to Rs 2,79,528 per kg in the latest session, marking a new record high.
The strong demand for silver is driven by a combination of factors, including haven demand, investment momentum, and supply constraints. According to a report by Bloomberg, haven demand has also been aided by US President Donald Trump’s capture of Venezuela’s leader, his renewed threats to take Greenland, and violent protests in Iran that could lead to a toppling of the Islamic regime there.
Citigroup Upgrades Forecasts: A Bullish Outlook for Precious Metals
Citigroup Inc. analysts have upgraded their forecasts for gold and silver to $5,000 per ounce and $100 an ounce, respectively, in the next three months. The upgrade is driven by strong investment momentum and a multitude of bullish drivers that are likely to remain intact during Q1FY26.
‘We upgrade our near-term price forecasts across the precious metals complex as investment momentum remains strong and the multitude of bullish drivers are now likely to remain intact during Q1FY26,’ the Citi note said. The gold price forecast implies an upside of 9% over the current level of $4,589, while the silver price forecast indicates a likely jump of 17% by April.
What Does This Mean for Indian Investors?
The surge in silver prices is a significant development for Indian investors, who have been increasingly investing in precious metals as a hedge against inflation and market volatility. With the Indian stock market expected to remain volatile in the coming months, precious metals could provide a safe haven for investors.
However, Indian investors should also be aware of the risks associated with investing in precious metals, including market volatility and liquidity risks. It is essential to do your research and consult with a financial advisor before making any investment decisions.
