Silver shines through correction after Diwali: Analysts see strong long-term case for the white metal
Silver’s recent price correction may appear unsettling to short-term traders, but investment experts see it as part of a healthy market cycle rather than a reversal in the metal’s long-term uptrend. According to ICICI Prudential Asset Management Company (AMC), silver’s growing industrial relevance and continued role as an inflation hedge provide strong support for its value in the years ahead.
Chintan Haria, Principal – Investment Strategy at ICICI Prudential AMC, said silver’s “dual nature as both a precious and industrial metal” gives it resilience in an otherwise volatile commodities market. “Silver has the twin advantage of being an inflation hedge and also an industrial metal linked to economic growth,” he noted.
ICICI Prudential AMC, which was among the first to launch a Silver Exchange Traded Fund (ETF) in India in early 2022, continues to see silver as a key diversification tool. Haria said the metal has delivered nearly 30% compounded annual growth over the past three years, driven by a mix of industrial and investment demand.
Industrial demand beyond jewellery
Silver’s role has grown far beyond ornaments and traditional uses. Industries such as electric vehicles, renewable energy, 5G telecom, medical technology, and biopharma are now among the largest consumers. The metal is also critical in solar panels, batteries, and electronic components, making it indispensable to the green energy transition.
“Given the demand-supply mismatch of recent years, price resilience may continue,” Haria said, adding that silver has outperformed inflation in four of the past six years. The Silver Institute estimates that global demand exceeded supply in 2024 and will likely do so again in 2025.
Short-term correction
ICICI Prudential AMC recently reopened its Silver ETF Fund of Fund (FoF) for investments after a temporary suspension earlier this year due to supply constraints and overheating in prices. Following a nearly 20% correction since mid-October, the fund house believes the market is stabilizing. “The roughly 15% decline from recent highs is a reasonable correction after a steep rally,” Haria said.
Global and technical factors
The gold-to-silver ratio—a key valuation indicator—rose from 70 in 2020–21 to 104 in April 2025, before moderating to around 83, a level Haria describes as “more reasonable.” The ratio suggests silver remains undervalued relative to gold, providing scope for future upside.
Macroeconomic conditions may also favor the metal. “Further interest rate cuts in the United States and progress on global trade relations, especially among the US, China, and India, could boost industrial sentiment and demand,” Haria said.
Technical analyst Avi Gilburt of Elliottwavetrader echoed the bullish long-term case. He noted that silver’s rally earlier this year reached a wave (3) peak and is now in a corrective wave (4). “As long as silver holds above $41, the setup for a final explosive wave (5) remains intact,” Gilburt said, projecting potential upside toward $75–$80 if 2010–2011 patterns repeat.
Balanced exposure advised
Haria suggested retail investors take measured exposure through Silver ETFs or FoFs, depending on whether they hold a demat account. “SIPs can help average out volatility, while lumpsum investments may be considered during price dips,” he said.
For most portfolios, a 5–10% allocation to silver is considered appropriate. “Asset allocation should remain the guiding principle for all investment decisions,” Haria emphasized.
Despite its recent pullback, analysts agree that silver’s industrial evolution and inflation-hedge status position it well for a durable rally over the long term.