Silver rate today overtakes crude oil price for first time since 1980: What’s driving this divergence? EXPLAINED

Silver rate today: Silver prices in India slipped on Tuesday, with MCX Silver trading at ₹199.10 per gram and ₹1,99,100 per kilogram, as investors turned cautious ahead of key US jobs and inflation data that could shape the Federal Reserve’s policy outlook going into 2026. The metal fell from ₹2,03,000 per kg in the previous MCX session but continues to hold a firm bullish undertone amid an exceptional year for industrial and investment demand.

Spot silver declined 1.7% to $62.88 an ounce, retreating from Friday’s record high of $64.65, while on MCX, prices recently reclaimed the crucial ₹2 lakh per kg mark, boosted by strong global cues and a weaker rupee. Year to date, silver has surged 121%, supported by tightening inventories and demand from solar, electronics, EVs and data-center applications.

Spot gold, too, edged lower, falling 0.3% to $4,289.17 per ounce, though bullion remains up 64% year-to-date after a record-breaking rally. Platinum climbed 1.7% to $1,812.80, and palladium rose 0.6% to $1,579.44.

Silver surpasses oil for first time since the 1980

In a rare market reversal, silver prices have now surged ahead of WTI crude oil for the first time since the early 1980s. One ounce of silver trades at $63.80, overtaking WTI crude at $57.30 per barrel — a stark contrast to mid-2022, when crude oil near $95 was more than 4.5 times costlier than silver at around $20.

The shift highlights a dramatic re-pricing across commodities. Silver is up more than 150% in 2025, marking its strongest annual performance since 1979. Since early 2020, silver has risen over 220%, while oil has slumped 44% over the same period.

WTI crude is now down around 20% in 2025, heading toward its worst annual decline since the 2020 pandemic crash. Oversupply, weakening global demand, rising inventories and mixed OPEC production strategies continue to weigh on the market. Geopolitical tensions have done little to offset the structural softness.

Why Silver is soaring while oil slumps

Silver’s meteoric rise reflects a mix of monetary and industrial tailwinds. Cooler US inflation, expectations of Fed rate cuts and a weaker dollar have increased its appeal as an investment asset. At the same time, structural supply shortages—caused by stagnant mine output and five years of declining above-ground stocks—continue to tighten the market.

Oil, on the other hand, remains stuck in a bearish cycle. Global oversupply, softening industrial and transport demand, efficiency gains and uneven OPEC production policies have capped prices. Demand weakness in Europe and China has intensified the slide.

Outlook: Can the rally in Silver hold?

NS Ramaswamy, Head of Commodity & CRM at Ventura, said silver’s surge was partly a delayed reaction to gold’s earlier rally. “Silver’s allure and rallying was ‘catch-up’ after gold’s rally, but unlike gold’s liquidity, silver lacks depth in the institutional lending base, making it vulnerable when London stocks tighten,” he said.

He noted that tightness in physical stocks led to the October squeeze, and when positions unwound between October 17 and 21, silver corrected 11%, while gold also dropped 6%. Beyond stocks tightening and silver’s addition to the US critical mineral list, multiple factors are driving the rally: stockpiling, rising demand from electronics, alternative energy, EVs, artificial intelligence and data centers.

Ramaswamy emphasised that silver is now poised to play a pivotal role as a “next generation metal” across industries essential to the green energy transition and digital transformation. He added that although silver remains secondary to gold as a safe-haven asset, monetary drivers continue to support its momentum.

Looking ahead, Ramaswamy said silver could potentially climb to $100 per ounce — roughly ₹3 lakh per kg — but warned that the metal is historically prone to extreme boom-and-bust cycles. “When supply catches up with demand, that would be a signal of Peak Silver,” he cautioned.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.