Silver prices fall: If white metal’s rates dip further, should investors see it as buying opportunity?
A day after news came that MMTC-PAMP, India’s largest precious metal refinery, ran out of metal stock for the first time in its history, silver exchange-traded funds (ETFs) continued their fall.
ICICI Prudential Silver ETF’s price on NSE fell by 7.34% on Monday (October 20, 2025), while ABSL Silver ETF also slipped by 7.66%. Nippon India Silver ETF’s price also saw a fall of 6.32% on NSE. Their prices dipped on a day when the BSE Sensex gained 412 points, while the Nifty 50 benchmark index closed trading up by 134 points. These developments came after the London silver market, where global silver prices are set, also ran out of available metal. The silver price in the London market fell from $54.45/oz on October 17, 2025, to $50.89 on October 18, a decrease of 6.54%. It, however, recovered to around $52/oz on October 20.
Silver spot prices fell on MCX too, from Rs 170,695 on October 17, 2025 to Rs 1,59,615, on October 20, 2025, a decrease of 6.49%.
If silver prices dip more, should investors use it as buying opportunity?
Silver shortage in market during festive season
While silver prices domestically and internationally fell, the demand for silver remained high in India during the festival season of Dhanteras and Diwali. Visuals on social media showed people in Indian cities coming in large numbers to jewellery outlets to buy gold and silver.
“Most people who are dealing silver and silver coins, they’re literally out of stock because silver is not there,” Vipin Raina, head of trading at MMTC-Pamp India Pvt, was quoted as saying by Bloomberg. “This kind of crazy market — where people are buying at these levels — I have not seen in my 27-year career,” said Raina.
Trivesh D, COO, Tradejini, says the MMTC-PAMP silver shortage is a signal of surging demand, with both retail and industrial buyers chasing the metal.
“The spike is also due to the festive season and short-term buying, which may cool once supply eases,” says Trivesh.
Is the problem of silver shortage serious in India?
Manav Modi, Analyst – Precious Metal -Research, Motilal Oswal Financial Services Ltd, says that the physical silver shortage in India is serious.
“It has disrupted both domestic and global parities. COMEX, spot, and futures markets have entered backwardation, while domestic premiums have surged Rs 20,000–30,000. This creates short-term panic and elevated volatility, so retail investors should exercise caution,” Neerav said.
Indian dealers charging steep silver prices
In Chennai last week, silver prices reached beyond Rs 2 lakh/kg last week. Mumbai’s Zaveri Bazaar also stopped further orders last week. While many dealers in Mumbai were reportedly charging silver prices well above benchmarks, bidding wars broke out between wealthy buyers who were more interested in silver’s availability than its price.
Trivesh says jewellers are also struggling to maintain adequate stock levels, as they need to replace whatever they sell to keep their reserves from depleting.
“Jewellers are clearly feeling the heat. Many have slowed new orders or even stopped taking fresh bookings for Diwali as supply remains tight,” says Trivesh.
“Every time a buyer walks in, dealers first assess the premium the customer is willing to pay, since prices vary sharply day to day,” says Trivesh.
Can silver prices fall more?
Trivesh says silver prices are likely to ease after the festive season, which could trigger a short-term price correction.
“This is a short-term market distortion, expected to last a few weeks to a couple of months. Once the imports normalise and jeweller buying slows, domestic prices may consolidate and realign with international levels over the next few weeks,” says Trivesh.
Should investors avail the opportunity to buy silver if its prices dip further?
Speaking about the long-term outlook of silver, Suvankar Sen, Managing Director and CEO at Senco Gold Ltd, said, “The current shortage of silver in the physical market is creating panic in the market. The sudden jump in physical demand is higher than supply. Retail investors must buy silver for the long run but be mentally prepared to keep buying if it dips.”
Silver price outlook
MOFSL in its recent report titled “Silver 2030 – The Unprecedented Rise” forecasts silver prices consolidating around $50–$55, with potential to reach $75 per ounce by 2026 and $77 per ounce in 2027 on COMEX.
“On the domestic front, silver prices could reach Rs 2,40,000 per kg by end-2026 and Rs 2,46,000 by 2027, assuming USDINR levels near 90–92,” as per MOFSL report.
