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Silver prices in India dropped after LBMA increased supply to cool Diwali demand.
India’s Diwali Silver Frenzy Sends Shockwaves Through London
Silver Price Outlook: Silver prices is likely to move south further after the halt in the record rally because of excess supply in the international market. Kumar Jain, national spokesperson for the India Bullion and Jewellers Association (IBJA) said that the major source of silver supply in the Indian market is from the London Bullion Market Association (LBMA), which has released the additional quantity to cool off the rising demand, according to NDTV Profit.
Due to high demand of silver in India during Diwali buying spree among customers, the sharp surge was seen in the prices of silver. According to Jain, LBMA offset the demand by increasing the supply into the market, leading to the drop in prices sharply.
Jain added that prices are expected to fall further.
This festival season Indian investors rushed to buy silver-based jewelleries or silver ETFs, leading to a crunch of physical silver. The demand has also amplified after several fin influencers such as Sarthak Ahuja promoted silver’s 100-to-1 ratio to gold.
The Bloomberg News report added that India’s largest precious metals refinery, MMTC-Pamp, exhausted silver stock for the first time ever in the history. Silver shortage has prompted bidding wars among dealers.
The demand is so high that premiums in India surged above $5 an ounce, far higher than usual.
Several prominent mutual fund houses such as Kotak MF, UTI and SBI MF in India are forced to halt new silver fund subscriptions.
Shortage of silver is clearly perceptible at the global level, coincided with China’s week-long holiday leading to cutting supply, surge in silver ETFs and US-bound shipments to pre-empt possible tariffs, according to Bloomberg News.
Post Dhanteras, silver and gold saw a sharp correction by dropping over 5-6% in the past two days. Jain said that silver sales have cooled off now.
At the international spot market, silver came down below $50 per ounce mark. The metal rallied over 60 per cent year-to-date.
Silver at India market was trading at Rs 1,62,000 per kg today, October 22.
India witnessed gold and silver sales worth around Rs 36,000 crore during Dhanteras, but the festive momentum soon eased. On the global front, the silver market continues to face deeper structural challenges. For the past five years, demand has consistently outpaced supply from mines and recycled sources, largely fueled by the solar industry’s rising requirement for silver in photovoltaic cells.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
October 22, 2025, 13:04 IST
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