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Informist, Thursday, Dec. 4, 2025

MUMBAI – With silver prices hitting new highs every week, many experts say the white metal's story is yet to unfold completely, with demand outstripping supply. And, India is at the centre of the story, according to an expert.

Silver's record-breaking run is being driven less by hedge funds and more by a wave of physical demand that the mining industry cannot quickly meet, according to Phil Baker, former chief executive of Hecla Mining and now an adviser to the sector. While investors have focused on Western futures markets, Baker argued that India now sits at the centre of the silver story. "For me, the thing that really drives silver is what's happening in India. That is the driver. That literally is the driver," he said in an interview with Kitco News Wednesday. 

India, now the world's fifth-largest economy, has seen silver imports soar. In October, India imported around 60 million ounces of silver, compared with about 15 million ounces a year earlier, he said.

"Despite the fact that silver is at all-time highs in rupee terms, the demand has been insatiable," Baker said.

Baker said the destination of the flow of metal out of London has been unmistakable. "If you look at where the silver went from London, it went to Mumbai," he said. He added that he would be watching one metric most closely – Indian imports. "The thing that I'm going to continue to watch is where is the demand in India? Is the demand continuing? Because that is the underlying driver of overall demand for silver," he said.

On top of India's jewellery and bar demand, Baker said industrial buyers are changing their behaviour as they confront higher prices and tighter inventories.

CME delivery notices for December showed about 8,800 contracts - roughly 44 million ounces - standing for delivery, with a growing share going to commercial users. Baker said his message to those users for the past 18 months has been blunt – "Don't be short silver. 

"They're finally putting the silver in place so that they're not short."

The combined pull from India and US bar buyers and industrial users is forcing a reset in how much metal has to sit in vaults, Baker said. "There's this musical chairs as to whether there's going to be enough silver for each individual market," he said. "What has certainly happened is that the demand has grown - particularly the investment demand - in a way that there's not enough available silver to be in inventory in each of those markets."  End

Compiled by Abhijit Doshi

Filed by Avishek Dutta

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