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The price of silver has fallen by about 6.3% from its all-time high of ₹ 2,59,692 per kg on January 8, 2026 to now ₹ 2,43,324 per kg. This decline has come after heavy buying in the beginning of the year. Despite this, silver has given excellent returns of almost 200% in the last one year.

When the price of an asset increases rapidly, fear of missing out (FOMO) develops and new investors start joining. People think that if silver has gone up so much, it will probably go up even further. But at the current level, it is important to take a careful decision before investing in silver ETFs.

Why is the price of silver increasing?

Demand for Solar Energy (Solar PV): Silver is a good conductor of electricity and heat, hence it is used extensively in solar panels. It is estimated that solar capacity will increase at the rate of about 17% by 2030. Newer technology solar cells (like TOPCon) use about 50% more silver than older models. EV vehicles use 67% to 79% more silver than conventional petrol-diesel vehicles. Silver is also used in charging stations, cables and electronics, due to which the demand increases further.

Data Center and AI: Silver is also needed in data centers, servers, semiconductors and AI hardware. Data center construction in America is expected to increase by 57% in the next 10 years.

Demand is increasing, supply is not so much

Supply is estimated to increase by only 1% in 2025, while demand remains high. This is the reason why a situation like shortage of silver is being created in the market.

Should you invest in silver ETFs now?

Demand for silver looks strong in the long term, sectors like renewable energy, EV, AI are supporting it. But the problem is that prices have already gone very high. After 200% growth in one year, the risk in making new investments increases. In such a situation, it is better for new investors to invest gradually (SIP or staggered investment) instead of investing a large amount in lump sum. For those who already have a silver ETF, it may be worth holding, but be cautious about buying more. Always keep silver ETFs as a small part of the portfolio (satellite allocation) and not as the main investment.