Silver At Rs 2.5 Lakh: Can Demand Really Hold Up? A Cautionary Tale For Investors, Says Market Voice
Higher prices eventually trigger more supply and reduce demand, says Kirttan Shah.
At around Rs 2,50,000 per kg, the question is no longer about how high silver can go, it’s about whether industries can realistically keep using it at these prices, and what that would mean for the cost of everyday products.
Kirttan Shah, Founder and CEO of Truvanta Wealth, argues that in commodities, prices are largely driven by demand and supply. Higher prices eventually trigger more supply and reduce demand. The key question then is: where will fresh supply come from? He points to three key sources:
Mines That Were Earlier Unviable May Restart
Silver supply was low because mining made little sense at Rs 75,000 per kg. But at Rs 2.5 lakh per kg, those mines can become viable again and may come back.
E-Waste Could Turn Into A Silver ‘Gold Mine’
At Rs 2,50,000 per kg, extracting silver from electronic waste becomes significantly more attractive, likely increasing recovery efforts.
ETF-Driven Demand May Reverse If Prices Turn
ETFs have pushed silver demand up by about 225%. If prices reverse, a large part of this demand could disappear quickly.
He reminds investors of the lithium story from 2022–23, when lithium used in lithium-iron batteries crashed about 85% from its highs. Similar cycles have played out in uranium and nickel too.
The takeaway isn’t a buy or sell call on silver: it’s a warning not to get carried away, as per Shah. Look at what happened to other “hot” commodities, avoid going crazy, and stick to your asset allocation, he advises.
