Why silver ETFs trading at a steep premium?
The rally is being driven by a cocktail of factors, including expectations of more interest rate cuts, ongoing political and economic uncertainty, the lingering US Federal shutdown, solid central bank buying (major central banks have snapped up 15 tonnes so far this year, which is though is much lower than last year’s 90 tonnes), inflows into gold exchange-traded funds and a weak dollar.
According to the World Gold Council, net inflows into domestic gold ETFs totalled $902 million in September, a 285% increase from $232 million in August. This was the fourth consecutive month of inflows, and all months of 2025 saw positive traction except for March and May.
According to Renisha Chainani, head of research at glod-trading platform Augmont, gold can show more upward spikes towards $4150 or Rs 1,25,000, while spot silver can easily cross $50 or Rs 1,50,000.
A key reason for silver rally is the muted mining of silver this year so far but industrial and investment demand has been on a steady climb driven by solar photovoltaics, electric vehicles, electronics, 5G infrastructure, and semiconductors, Axis AMC report said.
The domestic silver exchange‑traded funds (ETFs) are trading at steep premiums over international benchmarks amidst surging festive demand and constrained physical global supply, Axis AMC said. Investment inflows into silver products hit record levels globally in H1 of 2025, adding about 95 million ounces, exceeding the total inflows of the entire previous year.
This also has pushed total ETF holdings to roughly 1.13 billion ounces (worth over $40 billion) by June 2025, the fund house report said.
