Silver's role in Indian households during global crises

The last few weeks have shown a world where demand outruns supply in a way we haven’t seen in years. In India, Diwali festivities and beliefs around Lakshmi—the goddess of wealth—have sparked a buying spree that exhausted stockpiles and sent prices higher. A key piece of the story is a major Indian refinery that simply ran out of silver last week, a historic first. That shortage isn’t just a local problem. It’s rippling out to London and other big hubs, where traders are scrambling to secure metal. The spot price has jumped nearly 15% in the last month, and the market is watching carefully for what happens next.

The quick take helps explain why this isn’t a run-of-the-mill market blip. A surge in Indian demand, especially during the festival season, collided with a broader global squeeze. Silver ETFs have seen huge inflows—more than 10 crore ounces since early 2025—while Comex inventories have plunged by over 2 crore ounces, a sign that supply chains are strained at almost every turn. In London, prices surged to above $55 per ounce, a level that translates to roughly ₹4,500/- per ounce in rupee terms. The risk premium is real, and buyers are feeling the pressure.

Supply chains faced multiple hits at once. A multi-year boom in solar power, which uses silver in photovoltaic cells, increased demand from a bull market in asset classes that is chasing a hedge against a weaker dollar. Ships moved metal toward the US to dodge tariffs, pulling more metal away from other markets. The result: a global squeeze that left buyers in London and elsewhere scrambling for metal, with liquidity tightening and bid-ask spreads widening. The consequences were dramatic: hands trembled as bullion moved, and the market learned how quickly inventories can vanish.

So what does this mean for India and everyday people? Look, when silver becomes scarce, the price of silver jewelry and small, everyday silver items can carry a premium. For households planning Diwali gifts or wedding purchases, this isn’t just “price up.” It’s a shift in how people save, gift, and plan for the year ahead. The solar industry’s growing demand means silver remains a critical input for years to come, which could keep price pressure in play even after the immediate panic subsides. And for investors, the line between safe haven and physical demand is blurring. Silver is increasingly seen as a bet on actual metal stock, not just a hedge against currencies.

In India, the big question is what happens next. Will refiners build faster pipelines to restock, or will traditional buyers pull back as prices stay high? Will solar manufacturers lock in supply to avoid surprises? The patterns of Diwali demand, ETF inflows, and inventory moves could redefine how Indian households and firms think about silver for years to come. The market isn’t returning to old norms quickly. The crisis, born in festival fever and global supply strains, is pushing India to rethink its relationship with silver—and the world will feel the ripple. This shift isn’t temporary. It’s a recalibration that will shape pricing, policy, and everyday decisions for months to come.