Silver has tested $90 following a significant producer-price shock in April, marking a dramatic escalation from previous levels. According to Kitco News, this latest surge comes after huge opportunity in the fall to get in, with the metal currently undervalued. The forecast suggests silver could hit $200 as well, though some market participants remain skeptical about the $309 target. The prediction comes as silver continues its outperformance against gold, with the gold-silver ratio falling to 54.3, marking the lowest reading since end-January's 14-year lows of 45. Latest market updates show gold weakens while silver explodes, with inflation raging and the metals market experiencing chaos again.
The decline in the ratio comes after the BJP Government more than doubled customs duty on both gold and silver, hiking it from 6% to 15% and also raising platinum's import cost to 15.4% from 6.4%. As reported by MKS Pamp, this reverses India's shock cut to bullion import duty of mid-2024 in a bid to cap the country's swelling imports bill. With India having next-to-no gold mining output while last year's silver imports were 10 times its domestic production, Prime Minister Narendra Modi has also urged Indian households to drive and fly less frequently to cut the subcontinent's energy import bill. The cumulative 9-percentage-point increase could suppress annual demand by approximately 57 tonnes, with the steeper duty structure also risking a reignition of gold smuggling activity.
Physical silver demand is now encroaching on currency at the retail level, with retail silver purchases passing beyond jewelry to actual investment status. As reported by USA Today, physical silver's profile has expanded to that of a legitimate store of wealth with upside investment potential, being promoted in mainstream media. The backwardation trigger of October 2025 that put the LBMA in danger of default was due to retail and wholesale silver purchases by Indian Diwali celebrants. Chinese investors are now paying double-digit premiums for physical spot silver over futures market quotes, due to lapsed confidence in reliable future delivery. May Open Interest is at a record low (under 100,000 contracts) at the time of writing, with silver continually leaving the vaults, leaving ongoing looming physical metal settlement default concerns.
Halfway through its 6th consecutive year of production shortfall vs. demand, the cumulative global silver deficit is expected to reach 866 million oz. by the end of 2026. The US declared silver a Critical Mineral and strategic asset at the end of 2025, while China controls 70% of current global silver bullion supply and 40% of the global sulfuric acid supply essential for silver ore extraction. Central Banks around the world are accumulating physical gold and silver at a huge pace - China has acquired 800 MT of silver during Q1 2026 alone. Silver's superior electrical conductivity makes it an irreplaceably essential component for virtually every modern technology, with new humanoid robots expected to deepen demand significantly over the next decade.
According to Tata Mutual Fund, the expectation is that the ratio will rise back towards 68 level, mostly due to rise in gold demand amid geopolitical tension. The fund house expects gold prices to consolidate in the near term amid mixed macro signals, with short-term volatility of around ±5% likely. On silver, Tata Mutual Fund noted that prices could fluctuate alongside industrial metals amid concerns over global demand and slowing economic growth, advising a staggered approach to investment considering the volatile nature of the commodity. As MKS Pamp notes, industrial metals are looking through the Middle East quagmire, just like equities, with global stock markets holding at the past week's fresh all-time highs on the MSCI World Index despite rising geopolitical tensions.
