Sukumar SahSukumar Sah
The shimmer of gold and silver has rarely been this intense — or this consequential. Over recent weeks, precious metal markets have entered a new phase of exuberance that is reshaping financial and industrial strategies.
Gold (24-carat base price), after hovering around Rs 100,000 per 10 gram in early August, surged past Rs 1,18,000 by late September — buoyed by safe-haven buying amid geopolitical tensions, a weakening US dollar, and rising expectations of interest rate cuts by major central banks.
But it is silver that has stolen the spotlight. The white metal has soared to record highs, touching Rs1,49,000 per kilogram on September 27 before easing slightly to Rs1,48,900 —a rally that far outpaces gold in both speed and scale.
What began as an investment surge is now cascading across industries. From solar energy and semiconductors to electric vehicles and medical devices, silver’s soaring prices are forcing companies to rethink cost structures, supply chains, and innovation roadmaps.
Together, these twin rallies signal not just bullish commodity markets, but a fundamental shift in how businesses perceive and deploy precious metals in their strategic planning.
Long dismissed as “poor man’s gold,” silver today is an industrial powerhouse. Over half of global silver demand now comes from industrial uses ranging from semiconductors and 5G infrastructure to solar panels, EV batteries, and medical devices.
Its unmatched conductivity, reflectivity, and antimicrobial qualities make it indispensable for next-generation technologies. Yet, supply is struggling to keep pace. According to Axis Mutual Fund, 2025 will mark the fifth consecutive year of a global silver deficit, with consumption outstripping production.
Mining output has stagnated due to underinvestment, tougher environmental rules, and longer project gestation periods, while recycling provides only a partial buffer. The result is a structurally tight market where every increase in demand translates into significant price spikes.
Booming bullion prices turn gold, silver into strategic tools for industry
In India, festive and wedding seasons are amplifying the rally, as silverware, coins, and jewelry see renewed demand. For investors, silver has also become a hedge against inflation and market volatility — further tightening supply for industrial users.
Gold’s resurgence has been more measured but equally meaningful. Traditionally driven by financial sentiment, its latest rally reflects deep-seated anxieties about global stability. Central banks, led by China and India, are adding to reserves; investors are piling into ETFs and sovereign gold bonds; and corporate treasuries are exploring gold as a balance-sheet hedge.
For industry, rising gold prices mean costlier inventories and higher capital requirements, especially for jewellers and electronics manufacturers. Yet, they also offer opportunities. Gold-backed loans, structured finance, and new financial products are gaining traction, providing firms with alternative liquidity options in volatile times. Together, gold and silver’s rallies are pushing companies to embrace tangible assets as part of risk management and long-term planning.
The impact of soaring silver prices is particularly pronounced in sectors where the metal is irreplaceable. Renewable energy companies depend on silver for solar photovoltaic cells, and a sustained price surge could raise module costs by 5-10 per cent, potentially slowing solar adoption unless offset by subsidies or efficiency gains.
In electronics and semiconductors, demand for silver in high-tech circuits and connectors continues to climb, putting pressure on manufacturers already navigating global chip shortages. The electric vehicle sector faces similar challenges as silver demand in battery and sensor components rises, making procurement strategy vital for automakers.
Jewellery and consumer goods manufacturers are finding that higher prices may curb demand among price-sensitive consumers, prompting lighter designs and substitute alloys. In finance and investment, commodity traders, mutual funds, and banks offering gold and silver-backed instruments are benefiting from a surge in investor interest.
For each of these sectors, rising input costs are colliding with competitive pressures. Firms that fail to hedge or innovate risk margin erosion, while those that adapt swiftly can turn the rally into a competitive edge.
The message is unmistakable: gold and silver are no longer passive commodities; they are strategic assets central to business resilience. In a world shaped by geopolitical uncertainty, green transitions, and supply chain disruptions, companies that treat precious metals as part of their strategic toolkit — not just as inputs — will be better positioned for long-term stability.
The precious metal rally underscores a broader truth about the global economy: the future belongs to businesses that can adapt to scarcity, hedge against volatility, and innovate within constraints.
In this new metallic era, agility will be the true currency. Those who master it may find their strategies gleaming with resilience and profit, while those who ignore the shine risk being scorched by it.