Silver price action since October 2025 reads like a case study in how physical demand, geopolitics, monetary policy expectations and retail/speculative flows can all combine to create a dramatic commodity event. The metal moved from festive-season strength in October to an extraordinary run through late-2025 and early-2026 then a violent correction when US monetary politics suddenly changed the script. Below I walk through the timeline, quantify the moves, explain the drivers (with sources), and give a pragmatic outlook for investors.
Quick timeline & headline numbers (October 2025 → Jan/Feb 2026)
October 2025 – Silver in India jumped sharply during the festival/wedding season Indian domestic prices rose from roughly ₹1.51 lakh/kg at early October to about ₹1.85–1.90 lakh/kg by mid-October (≈₹185–₹190 per gram).
Oct–Dec 2025 – Imports and physical demand surged India’s silver imports reportedly rose 528.7% YoY (huge retail + industrial buying), contributing to acute local tightness. By late December some market reports showed silver trading near ₹2.81 lakh/kg, implying an approximate ~174% change vs an earlier base numbers that underline the extraordinary local move.
End-2025 / Jan 2026 – Silver also rallied internationally many sources reported silver up 100%+ in 2025 from prior-year levels, with spot silver surging from $~40–$50/oz range into the triple-digits at times during the frenzy and hitting major intraday moves around $120/oz in peak moments before volatility returned.
Late Jan – early Feb 2026 – A sharp reversal occurred after the political shock of a US Fed-chair nomination (and renewed dollar strength). Precious metals experienced dramatic one-day swings silver plunged (reports cite an intraday fall of ~31% on the single day around the Fed-chair news), taking much of the prior gains off the table. Market volatility prompted margin hikes by exchanges and large stop-outs.
Why it started in October 2025 the physical demand story
October is India’s peak silver/gold season (Dhanteras, Diwali, weddings). In 2025 two things made that season exceptional: –
- Strong retail buying – festival and jeweler purchases were higher than normal, pushing domestic prices up sharply. Mid-October prices in India hit ₹185–₹190/g (≈₹1.85–1.90 lakh/kg).
- Huge import surge – customs data and market commentary flagged a YoY import surge of ~528%, signaling restocking and physical demand that quickly tightened local supply. When physical demand outpaces available nearby supply, futures and spot markets amplify moves.
These physical flows created a price floor under the market and once international flows took notice, momentum compounded across ETF inflows, futures, and retail leveraged positions.
Macro & monetary fuel why the rally extended
Beyond physical India demand, several macro/monetary factors amplified the move into late-2025: –
- Interest rate expectations – Markets priced in rate cuts during 2025 across parts of 2025–26, which reduced real yields and pressured the US dollar a classic tailwind for precious metals. Expectations of lower yields increase the attractiveness of non-yielding assets like silver. Analysts repeatedly cited the prospect of easier policy as a central driver of the metals rally.
- Geopolitical risk – Periodic geopolitical tensions (regional conflicts, trade frictions and specific U.S. foreign policy events) boosted safe-haven buying. Gold and silver often move together in these episodes; silver carried additional industrial/commodity upside. Reuters and other outlets linked spikes to geopolitical flashes that sent safe-haven flows into metals.
- Supply tightness & structural deficits – Several analysts noted a multi-year structural deficit in silver (supply constraints in mining + higher industrial/photovoltaic demand), which made price more sensitive to demand shocks and speculative momentum.
The speculative/technical layer how momentum fed on itself
A smaller, more liquid market like silver price is particularly vulnerable to leveraged retail flows and ETF positioning. In 2025–26: –
- Retail and leveraged futures flows accelerated the up move exchanges raised margins as volatility rose. CME and other venues increased margin requirements during late-stage excitement.
- Momentum crowding caused sharp one-day moves (both way up and way down). Once large short-covering or profit-taking starts, the moves can be amplified because silver has lower market depth than gold.
The Feb 2026 flash reversal politics and the Fed nomination
The most abrupt pivot in this episode came when political news altered Fed expectations. The U.S. president’s choice of a new Fed chair nominee a perceived shift in likely future monetary path strengthened the dollar and pushed real yields up in short order. The market reaction: large, rapid liquidation of leveraged metal positions and an outsized one-day drop in silver (reports cited intraday falls in the 30%+ range). That single day erased a significant portion of 2025’s gains and showed how directionally fragile momentum is in small precious metal markets.
Numerical snapshot
India mid-Oct 2025 – ~₹1.51 lakh/kg → ₹1.85–1.90 lakh/kg (festival surge).
Import surge – +528.7% YoY (silver imports into India during the run).
Reported peak local levels (late-Dec 2025) – Some market reports cited ₹2.81 lakh/kg in end-Dec coverage (reflecting late rally peaks).
Global 2025 total gain – Analysts reported ~100–150%+ moves for silver in 2025 from the prior base in many narratives (varies by region/contract).
Single-day plunge (early 2026) – Reports of a ~31% plunge intra-day after the Fed-chair nomination news.
JARVIS VERDICT
The silver episode from October 2025 through early-2026 is a textbook example of how physical demand, macro-economics, geopolitical risk, and market structure combine to create outsized moves in a smaller, more leveraged commodity market. The rally produced eye-watering percentage gains and record domestic prices in India but it also highlighted the speed with which expectations (especially about US monetary policy and political actions) can reverse that tide.
If you’re considering exposure now, decide first whether you are trading volatility or investing in structural demand. Keep position sizes modest, use disciplined risk controls, and watch the three triggers (Fed posture, physical flows, margins/positioning). For long-term allocation, silver remains an interesting diversifier but expect a roller-coaster. For tailored allocation or physical vs paper trade decisions for your stock portfolio, consider consulting a SEBI-Registered Investment Advisor in India.
