Silver shortage grips Zaveri Bazar as jewellers stop taking new orders

Even though the price of silver has fallen by Rs 2,000 per kg to 1.74 lakh in a day, jewellers from Zaveri Bazar has stopped accepting fresh orders for silver ornaments and bullion due to a severe shortage of physical silver, according to Rajesh Rokde, chairman of All India Gem & Jewellery Domestic Council (GJC).

Rokde said that the premium on physical silver has surged significantly, reaching up to Rs 30,000 per kilogram, driven by strong demand and limited supply. This shortage is attributed to increased industrial and investment demand, both locally and globally.

The GJC chairman said that strong demand from countries like Australia, Turkey, and China is exacerbating the shortage. "Some experts predict a temporary correction in prices around November, but overall appreciation is expected in the long term," he said.

A report released by Motilal Oswal Financial Services Ltd. (MOFSL) on long-term outlook on silver till 2030 said that silver prices have surged past $51.30 per ounce in October 2025, registering over 70% year-to-date gains and reaching a 14-year high. Unlike the speculative rallies of 1980 and 2011, MOFSL notes that the current uptrend is grounded in strong fundamentals — with industrial demand now accounting for 59% of total usage and a structural supply deficit persisting for seven consecutive years.

Global silver supply stands at 31,000 tonnes, while demand exceeds 35,700 tonnes, resulting in a deficit of nearly 118 million ounces (3,655 tonnes)— one of the largest in recent years. This deficit is expected to continue for the fifth consecutive year in 2025. Industrial usage reached a record 680.5 million ounces in 2024, projected to exceed 700 million ounces in 2025 — led by the solar, electric vehicle, and electronics sectors. The solar photovoltaic (PV) industry alone consumes over 200 million ounces annually, and could rise to 450 million ounces by 2030.

Each electric vehicle uses 25–50 grams of silver, with global EV production projected at 14 million units in 2025, the report said. MOFSL 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 ₹2,40,000 per kg by end-2026 and ₹2,46,000 by 2027, assuming USD INR levels near 90–92.

Global visible inventories have declined sharply, with LBMA vault holdings down 31% since 2020 — from 35,667 tonnes to 24,581 tonnes.Persistent backwardation and elevated Exchange for Physical (EFP) spreads underscore tight physical availability.

Silver ETFs in India have surged 69% year-to-date in 2025, with monthly inflows up 180% in August, signalling rising institutional and retail participation. The USD/INR is projected to range between 90 and 102 through 2030. MOFSL notes that this currency depreciation amplifies INR-denominated returns, making silver a strong portfolio diversifier for Indian investors.