Samco Securities predicts silver rally to Rs 1,17,000, cites 5 key factors

Silver is poised to hit a target of Rs 1,17,000 in the next 12 months, according to estimates by domestic commodity brokerage firm Samco Securities, a projection coming in as silver recorded a 41% increase since December 2022, with several supportive tailwinds continuing to drive the market.

The current market outlook for silver is based on a range of factors that collectively suggest a strong bullish momentum in the white metal. Here are 5 factors that the commodity broker believes will lead the rally:

A key factor supporting the silver rally is the weakness in the dollar index (DXY). When the dollar weakens, more dollars are required to purchase the same amount of silver, naturally pushing prices higher. Additionally, technical analysis reveals a bearish head and shoulder formation in the DXY. If the index remains below 107 and potentially falls to the 100 mark, it could provide significant positive momentum for silver prices.

Currently, the silver-to-gold spread is trading near multi-decadal lows at 1.11%. This means that the price of one ounce of silver is just 1.11% of one ounce of gold, an unusually low ratio, which indicates that silver is undervalued relative to gold, suggesting a strong likelihood that silver prices will move higher.

Industrial demand for silver is surging, driven by its essential use in products like electric vehicles and solar panels. With forecasts indicating a negative supply balance by 2030, the growing demand over supply is expected to push silver prices further upward.

Leasing rates for silver have soared to 8%, a stark contrast to the typical rates below 1% or even negative values during oversupply. This dramatic increase indicates a silver squeeze, creating a perfect environment for a bullish run in silver prices.


(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)