Daybreak - Inside the metal market’s most surprising meltdown

Episode Date: October 15, 2025

Silver is having a moment, and not in the way you might think.Once hoarded by billionaires, now sought after by AI and clean energy — the world is experiencing a historic silver crunch. Jewellers are refusing orders, mutual funds are freezing ETFs and Diwali shopping just got a lot more expensive.The thing is, silver supply has been trailing demand for years now. And now, the gap is finally showing. What's behind this sudden shift?Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Imagine it's 1980 and you're in New York walking past Tiffany's. The window shines with pretty silver things, but something's not quite right. Just that morning, Tiffany's had made a phone.

full-page announcement in the New York Times not to sell but to scold. The jeweler publicly called out three oil tycoons from Texas, the Hunt brothers. These brothers had collectively purchased nearly one-third of all privately owned silver in the world, that to drive up the prices. And drive up it did. This move had made the prices go up from $6 to $50 in a year. Tiffany's condemn this move. They said it was unconscionable. How could the brothers hold billions, yes billions of dollars worth of silver while making other space sky high prices? Fast forward 45 years and silver is in the headlines again. A few days ago, Anant Jatia, the CIO at Greenland Investment Management, told Bloomberg that he

had never seen anything like it ever. He said what we are seeing in silver today is entirely unprecedented. He was, as you may have guessed already, referring to the worldwide silver crunch that's going on right now, which is probably worse than what happened in 1980. But this time, there's no billionaire cartel to blame and it's a global crisis. And despite the fact that silver has always played second fiddle to gold over here, India isn't immune. We've sort of taken silver for granted, even though the demand for it has always been mostly consistent. But the shortage has gotten so bad here that jewelers are actually suspending new orders and that too just as the festive season is beginning.

Jigar Patel, the treasurer of the Jewelers Association of Ahmedabad, said in a recent interview that this is the first time in his memory that there's been a shortage of silver in the city. The trouble is silver isn't just for jewelry. It's crucial for a lot of essentials and tech from electronics to renewable energy because it's an excellent conductor of electricity. So put two and two together and you know why the demand has surged recently. And of course, the production of silver itself has not been able to keep pace. Clearly, everyone is feeling the hit.

In India, bullion traders have hit pause. And even ETFs or exchange traded funds have frozen new subscriptions. Across the Atlantic, the United States listed silver as a critical mineral. A move meant to secure supplies for tech development, defense and clean energy manufacturing. But do you remember how Anandh Jatia called this shortage unprecedented? The thing is, actually it isn't. This silver shortage has been a long time coming.

And the US is perhaps the only country that was ready for it to hit when it did. Welcome to Daybreak, a business podcast from the Ken. I'm your host Rachel Verkes and every day of the week, my co-host, Niktha Sharma and I will bring you one new story that is worth understanding and worth your time. time. Today is Thursday, the 16th of October. So what does the US have to do with why you're paying a small fortune for a silver bracelet? It really comes down to the scale of technological innovation we're living through right now. As we mentioned earlier, silver has become essential to almost every electronic and communication

device, from smartphones and smart watches to computers, plasma screens and even hearing aids. Silver's demand is even higher and bigger industries. In fact, solar panel is, The terminals alone could consume nearly all of the world's annual silver supply within 25 years. Of course, we can't forget the AI and EV boom either. They are both driving demand for chips and circuit boards which need silver, putting further strain on already tight supplies. Now, if you didn't know, around 70% of all silver is produced as a byproduct of copper, lead, or zinc production. And that's not a production model that you can just scale up when prices and demand

spike. In India alone, 80% of the silver we use is imported. The concerning part is that silver supply has been lagging behind demand for the last four years. An analysts expect 2025 to mark the fifth straight year where demand continues to outpace stagnant mine supply. In fact, experts warn it could take the better part of the decade for new production to meaningfully address this imbalance, which means things are not looking too good right now. So this rise in demand for silver, coupled with the fact that it's increasingly becoming difficult to source, is what led to the US listing it as a critical mineral just this September. More on this in the next segment. First, let me explain to you what a critical mineral is.

Basically, the US critical minerals list outlines resources that are deemed critical to the country's economy and national security. To make it to the list, the mineral needs to meet these three criteria. 1. It should be essential to the US economy or defence. 2. It should be vulnerable to supply chain disruptions. And finally, 3, it should be vital to manufacturing applications such as technology, energy, healthcare or agriculture. And once a mineral is on the list, it can fall under special supply chain monitoring, strategic stockpiling and trade policy scrutiny. Now the thing is, one of the major producers of silver is Mexico. And up until last year, the US was getting a majority of its silver imports from there.

Now, we all know that the ties between the US and Mexico are strained at best. So, the US's anxiety about the silver supply chain being vulnerable to disruption is not really a stretch. If Mexico ever decided to stop trading with them, the US would be in a very tricky position. So, as an investment instrument, it's clear why silver is essential to the US economy. But what does it have to do with defence? Well, it's in the same vein as silver being indispensable to new technology. In a nutshell, when it comes to defense applications, silver is essential for GPS, night vision, radar, detection and missile guidance systems, just to name a few. Obviously, the US recognize the importance of silver and the challenges that come with.

sourcing it. Then, to get ahead of the curve, the country updated silver imports earlier this year by 55%. And it wasn't just the government. You see, once silver was listed as a critical mineral, investors and traders grew concerned. They were worried that this could mean that silver would be subjected to import or export tariffs. This was especially a concern because Trump had ordered a tariff probe on critical minerals in April this year. Obviously, traders feared tariffs could raise costs on the silver they already held, sparking a rush to move it to the US wards before any policy change took place. Currently, the Comex or Commit exchange inventories in the US are stockpiled with more than 500 million ounces of silver, which, according to experts,

is about four years worth of domestic demand over there. So now, unlike the 1980s silver crisis, where it was the Hunt brothers who hoarded the metal, this time it is the US itself. And naturally, We're feeling the effects here in India. Stay tuned for more on this. In India, retail prices for silver have skyrocketed as the gap between supply and demand finally started to show. For instance, over the past eight months in India, imports fell by over 40%. And in just 10 days, retail prices spiked by 40,000 rupees per gg. And even major mutual funds like SBI and Kotuk for silver ETF investments due to a lack of the physical metal itself.

Why? Because while the ETF doesn't need you to own real silver, these funds still need to back up the investment with physical silver. And there is no physical silver to be had. You see, even importing silver is not an option anymore for these funds. Because the demand for silver in India is so high, it's selling at a 5 to 12% premium as compared to the rest of the world. Yep, you heard that right. During the festive season, even in a global shortage, the medical shortage, the medial Little is perhaps at its most expensive in India because we just won't stop buying it. Now, let's look at the ways this silver shortage could affect you. First, let's get the obvious one out of the way. Jewelry will be more expensive.

We already talked about how jewelry makers are struggling to meet demands and are refraining from taking on new orders altogether. Second, it could cascade into a hike in prices for electronics. Electronics are already made of several imported components. If silver becomes difficult to procure, the price of manufacturers pay to make it happen could cascade into your final bill. And lastly, the shortage could ripple into delays and higher costs for everyday services and products. Silver is critical in components like switch gears, signaling systems and other electrical infrastructure. If factories can't get enough, projects in silver, railways and telecommunications could slow down,

which might mean delay train services slower rollout of new tech, or even slightly higher utility bills for you at home. So what's next? Well, it seems like this crunch isn't going anywhere anytime soon. Some analysts from Motila Lawsville conjecture that we are going to see a new high baseline for silver prices. This will take place over the next couple weeks as the market stabilizes. But because there's nothing that can be done in the short term regarding the supply, it seems like even with the higher prices,

Silver won't be seeing supply demand equilibrium till 2028. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the Ken web. website. Today's episode was hosted and produced by my colleague Rachel Vargis and edited by

Rajiv Sien.