MCX Silver Hits All-Time High After 4% Jump – Key Factors Explained

On Monday, the Silver price on the Multi Commodity Exchange (MCX) in India surged by 4% climbing to Rs 1,78,649 per kilogram from the previous close of Rs 1,71,637 per kilogram. This rally marks fresh all-time highs for the December 2025 futures contract after hitting these record levels. Silver now gains steady traction, reflecting sustained bullish momentum in the domestic market.

Key Drivers of the Rally

Industrial demand is driving the surge in silver prices, as India's expanding solar power initiatives and electric vehicle manufacturing sectors consume vast quantities of photovoltaic-grade silver, with no viable substitutes available. 

A persistent global supply deficit increases this surge, with mining disruptions and by-product limitations from base metals like copper failing to match consumption needs.

• Surging Industrial Demand

Electric vehicle manufacturing accelerates demand, as EVs use up to twice the silver of traditional vehicles in powertrains, battery connectors, and electronics, with analysts forecasting automotive needs to triple by 2040 amid India's EV push. As per sources, the Solar PV consumes 17-20% of global silver, and the in the coming years, it can cross 20%, which positions India as one of the top silver consumers despite high prices.

• US Fed Rate Cut Expectations

With anticipation of a US Federal Reserve rate cut of 25 basis points at the December 9-10 meeting, safe-haven flows into silver are expected as per multiple sources. Indian investors can benefit as lower US rates weaken the dollar, thus improving MCX silver's appeal through cheaper global imports and rupee fluctuations.

• Currency and Economic Factors

Rupee depreciation against the US dollar increases import costs, creating a premium that pushes MCX prices higher in line with global trends, where silver nears $58 per ounce. Inflation hedging draws investors, investing through digital platforms and ETFs, bolstering physical and futures demand as a counter to economic volatility. Geopolitical tensions and anticipated US Federal Reserve rate cuts further support the uptrend, aligning with India's macroeconomic policy shifts.

• CME Data Center Cooling Issue Impact

A recent CME Group data center cooling failure intensified silver's rally volatility, as the exchange halted trading across futures, including silver, due to a chiller plant malfunction on November 27-28, 2025. This outage from multiple cooling unit failures froze Globex operations for hours, halting price discovery, and sparked short-covering upon resumption, propelling global silver toward $56 per ounce. The CME Group controls around 90% of futures, options, and commodities trading volumes.

Outlook for Indian Investors

Based on various sources, analysts anticipate continued upside with a rise slower than the previous surge. This rally can benefit producers like Hindustan Zinc while urging caution on short squeezes, positioning silver as a commodity play.