Investors hoping for silver to quickly reclaim its January 2026 record highs may need to adjust their expectations, according to Navneet Damani, Head of Commodity Research at Motilal Oswal Financial Services. While he maintains a constructive outlook for the metal, suggesting it could climb to Rs 3.25 lakh domestically, Damani asserts that the previous surge was fueled by speculative excess that is unlikely to be replicated soon.
Recalling January's Speculative Spike
The extraordinary rally that briefly pushed silver prices to Rs 4 lakh-Rs 4.25 lakh per kg in January 2026 was largely driven by what Damani described as "froth" and significant speculative activity, alongside substantial ETF buying. He explained that this movement overshot fundamental valuations, creating an unsustainable spike.
Such speculative rallies, while sharp, rarely prove durable without a fundamental shift in demand. Damani noted that the kind of ETF-led momentum seen previously would be "hard to replicate in the near future." This implies that any subsequent upward movement in silver prices will likely be more gradual and sensitive to underlying valuations.
The Rs 3.25 Lakh Target Zone
Damani remains positive on silver's potential to reach the equivalent of $90-95 per ounce internationally, which translates to approximately Rs 3.2-3.25 lakh in the domestic market. This forecast indicates meaningful upside from current levels, even if the metal doesn't immediately challenge its past peak.
He further suggested that silver could extend somewhat beyond this range, possibly reaching "three twenty-five, three fifty… at best." For investors, this positions silver as a story of tactical accumulation rather than a rapid, runaway breakout.
Gold's Stronger Position
A key aspect of Damani's market outlook involves the relative performance of precious metals. While silver is expected to advance "in tandem" with gold, he emphasized that gold's upside appears significantly stronger. "However, for gold it is beyond that," he stated, suggesting that gold is better positioned to surpass its previous highs over the medium term.
With festive demand approaching and a supportive macroeconomic environment, both gold and silver remain on investors' radars. However, if Damani's analysis holds, silver's rally will likely be grounded and steady, while gold could emerge as the more compelling leadership trade within the precious metals market.