SAMCO Securities was among the early voices flagging a potential breakout in silver, with Apurva Sheth, Head of Market Perspectives & Research at the brokerage, pointing to technical compression, relative undervaluation and macro tailwinds as key signals.
In an interaction with CNBC-TV18, Sheth explained why silver’s breakout has been swift but unstable, describing the move as a transition from a valuation-driven trade to what he now views as a broader structural cycle.
Sheth said three data points stood out when his team first highlighted the silver opportunity.
“First was technical compression,” he noted.
Silver had remained locked in a multi-month $21–26 an ounce range, with long-term moving averages converging, a setup that, historically, has preceded sharp moves.
Second was relative undervaluation. Silver was trading nearly 50% below its all-time high, while the silver-to-gold ratio was hovering near historic lows, suggesting it was inexpensive compared to gold.
Third was macro alignment.
Expectations of US rate cuts, a softer dollar and rising industrial demand — particularly from solar and electronics — created what Sheth described as a “classic case of price compression meeting macro tailwinds.”
From accumulation to structural trend
Sheth said the silver thesis evolved in three distinct stages since 2023.
The first stage was accumulation, when silver appeared undervalued, largely ignored and technically coiled. The second stage began with breakouts above key domestic price levels such as ₹78,000 per kg and later ₹1 lakh per kg, which historically signalled strong forward returns.
Momentum indicators, he said, reinforced the thesis.
The third stage, according to Sheth, is what he describes as a structural bull market.
“It’s no longer just a breakout trade,” he said, citing sustained industrial demand, supply tightness and exchange-traded fund (ETF) flows as factors broadening the cycle beyond short-term speculation.
At the same time, the rally has not been linear. Sheth pointed to the sharp correction on January 30, 2026, when silver fell more than 26% in a single session — the second-largest decline in 46 years after 1980.
The speed of both the rally and the correction, he said, stressed the metal’s inherent volatility.
Valuation to structural shift
Initially, the call was both valuation-driven and cyclical, Sheth explained.
Silver was inexpensive relative to gold, and the macro cycle appeared to be turning toward rate cuts. In April 2024, when Comex silver was consolidating in the $21–26 an ounce range, his team had outlined a scenario where prices could move toward $50 an ounce.
Today, he sees the case as structural, backed by multi-year base formation, rising industrial use and supply-side constraints, suggesting the move may extend beyond a short-term cyclical rebound.
Strategy for retail investors
Given current global macro conditions, Sheth advised retail investors to approach silver with discipline rather than urgency.
He outlined three broad principles: avoid fear of missing out (FOMO), focus on allocation instead of speculation, and monitor key macro variables such as the US dollar, real yields and ETF flows.
Silver, he said, tends to perform when the dollar weakens and liquidity conditions ease.
In terms of portfolio construction, he suggested a 5–15% exposure depending on risk appetite, while cautioning that volatility remains a defining feature of the asset class.
“The opportunity today is not about chasing,” Sheth said. “It’s about disciplined participation in what appears to be a structural cycle.”
While probabilities may favour an upward bias, he added, investors should be prepared for sharp interim swings, a reminder that silver’s appeal lies as much in its cyclical nature as in its long-term industrial relevance.
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