While silver’s bull case (till 1-2 years back) was built on the combination of factors like rising industrial use, supply deficit, undervaluation vs gold, growing geopolitical instability and possibility of precious metals regaining the lost respect vs paper/fiat currency (debasement thesis), things are a little different now with silver already up more than 200% in recent times.
In INR terms its up from Rs 1 lakh/kg in Apr-2025 to almost Rs 3.25+ lakh in Jan-2026! In USD too its from $32-33 to $110-115 in same time!
My view about Silver (was, and still) is that given its historically unreliable nature, it does NOT have a case for making it a large or the core part of a long-term portfolio. No matter how confident you are. It is true that last year has been crazy. Even those of us who were bullish about silver’s long term multi-year prospects, have been shocked by this accelerated and parabolic up move. It’s like that the return expectations of several years from silver have been already achieved in just a year! Like Silver God decided to bless early movers and decided to ‘front’ load the majority of the expected potential gains, if you understand what I mean here.
The thesis of commodity supercycle and silver correcting its perennial undervaluation (vs gold) still stands true to an extent. But it’s also true that huge rallies tend to attract speculation and more and more people then start giving into their FOMO. And most dangerous moments are often when the confidence is highest driven by such fomo. This kind of sharp parabolic move generally tends to happen towards the end. I am not saying this is the end or the top. I don’t know. All I am saying is that when price moves up at such sharp angles, the risk-reward no longer remains favourable for at least the new entrants.
If you zoom out and look back a few decades, then it becomes clear why silver is notoriously famous for getting deep cuts after big rallies (definitely read what happened in 1980 Hunt Brother’s episode and then in 2011 one too). It may not seem obvious now, but when the speculative demand disappears, it disappears fast, leading to painful falls followed by long periods of no returns.
I am coming across people who normally find it even difficult to save money (let alone invest properly), looking to buy silver for a quick doubling of their money! Signs of times.
And even if it may not be right to call it a bubble yet, it is and will definitely remain volatile. And while multiple factors may still support a thesis for higher silver prices, irrespective of the past market cycles, its honestly best to be careful. And it won’t be bad to remind ourselves that Warren Buffett once said – Be fearful when others are greedy.
PS – I am no expert. But I am curious and interested in Silver and what’s happening. The above are just my general thoughts. Please don’t consider this as investment advice. Everyone’s risk appetite is different and hence, you should act accordingly. Or talk to your investment advisor about what needs to be done.