Silver Prices Soar to Record ₹1.3 Lakh/kg Amid Fed Rate Cut Expectations and EV Demand

Silver prices in India have reached a historic high, with rates touching ₹1.3 lakh per kilogram on September 12, 2025. This surge marks a significant milestone for the white metal, driven by a confluence of global economic factors and rising industrial demand.

Surge in Silver Prices

On the Multi Commodity Exchange (MCX), silver futures for March delivery climbed ₹1,668, or 1.3%, to ₹1,30,000 per kilogram, setting a new all-time high. Similarly, December futures rose ₹1,674, or 1.32%, to ₹1,28,612 per kilogram. Spot silver prices also saw a significant increase, jumping ₹2,100 to ₹1,32,000 per kilogram.

Factors Driving the Surge

Anticipated U.S. Federal Reserve Rate Cut

Investor sentiment has been buoyed by expectations of a potential interest rate cut by the U.S. Federal Reserve in its upcoming policy meeting. Analysts are pricing in a 93% probability of a 25 basis-point reduction, with some speculating an even larger cut. Such a move would likely weaken the U.S. dollar, making silver more attractive as a safe-haven investment.

Industrial Demand from Electric Vehicles

The growing adoption of electric vehicles (EVs) has significantly increased demand for silver, a key component in EV batteries and electronics. This industrial demand, coupled with supply constraints, has tightened the physical silver market, further driving up prices.

Implications for Indian Investors

For investors in Tier 2 cities and beyond, the surge in silver prices presents both opportunities and challenges. While the appreciation in silver value offers potential returns, the high prices may deter new buyers, especially in rural and semi-urban areas where purchasing power is limited. Additionally, the increased cost of silver could impact the affordability of silver jewelry and industrial applications, potentially affecting demand in these regions.

Conclusion

The record-breaking rise in silver prices reflects a complex interplay of global economic policies and shifting industrial demands. As investors and consumers navigate this landscape, the future trajectory of silver prices will depend on developments in U.S. monetary policy and the continued growth of sectors reliant on silver. For now, silver stands at a historic high, offering a glimpse into the evolving dynamics of global commodities