Silver prices surpass ₹2 lakh mark in domestic markets, gold touches fresh peak: What's driving the precious metal rally?

Silver futures for March delivery rallied past the ₹2 lakh mark on Friday, December 12, climbing ₹1,420 (0.71%) to a lifetime high of ₹2,00,362 per kg on the Multi-Commodity Exchange (MCX). On Thursday, silver contracts closed at ₹1,98,942 per kg on the MCX.

According to local jewellers, silver prices have crossed the ₹2 lakh mark in the physical market as well. The white metal is hovering at around ₹2,00,400 per kg in India on Friday, according to India Bullions.

So far in 2025, silver has surged nearly 125% in the domestic market.

International markets

In the international markets, Comex silver futures rose to a record high of $64.74 per ounce on Friday.

On Thursday, spot silver climbed to a lifetime high of $62.88 per ounce, rising by $1.06 (1.71%).

Silver prices have risen by over 117% in the international markets since the start of the current calendar year.

Reasons behind the silver rally in 2025

Silver has given remarkable returns in 2025, rising by over 100% in both domestic and international markets. The primary reason behind the bull run is silver's rising industrial demand and supply shortages.

The demand for the white metal has been on a consistent rise in the global market due to its increasing use in crucial sectors like electric vehicles (EVs), solar, electronic devices, 5G, medical equipment, etc.

Rising demand and supply deficit, leading to a widening supply-demand gap, has been pushing silver prices to new record highs.

Along with this, silver rises along with gold due to safe-haven demand. In uncertain situations, geopolitical instability, trade war concerns and weak currencies, traders shift to safer investments like precious metals.

The dramatic increase in silver prices and rising geopolitical tensions in 2025 also led to higher investor interest in the white metal market, aiding its rally further.

Gold prices

Gold futures for February delivery touched a new lifetime high on Friday, rising by 1.84% (₹2,495) to ₹1,34,964 per 10 gram on the MCX.

In the physical market as well, gold prices hit a fresh record high, climbing 1.7% to over ₹1,35,000 per 10 gram in India, as per India Bullions. The previous lifetime high of approximately ₹1,34,800 per 10 gram was touched near Diwali 2025 due to high festive demand and firm global cues.

After the US Federal Reserve announced a 25 bps rate cut in its latest FOMC meeting, leading to weak currencies, gold prices are rising to fresh record highs.

As mentioned above, gold is a safe-haven asset, and its demand rises when other investments get riskier. Additionally, increased central bank gold buying in 2025 has also been boosting bullion prices.

In the coming weeks, US job and inflation data, along with domestic demand and potential profit booking, will give cues on gold and silver outlook for 2026.