There are lots of variables and dots to be connected in figuring out the future price of silver e.g. its supply and demand, ratio to gold, relationship to gold, and its uses both industrial, investment and store of wealth.
Here is one variable that is sort of off the main focus.
Notice the gold/silver ratio India is establishing. 10 to 1!?
AI Overview
While India is not going to make silver a reserve currency, recent policy changes signal a historic "remonetization" of silver within the Indian banking system, a move with significant domestic and potential global implications
. This is not an effort to replace the Indian Rupee, but rather to expand the country's monetary system to formally include silver alongside gold.
How India is remonetizing silver
In April 2026, new Reserve Bank of India (RBI) regulations are scheduled to take effect that will formally recognize silver as collateral for bank and non-bank loans.
- Expansion of collateral: Traditionally, Indian households have used gold jewelry for collateral. The new rules expand this to include silver jewelry and ornaments, allowing borrowers to pledge up to 10 kg of silver or 1 kg of gold for loans up to ?2.5 lakh.
- Establishment of a ratio: By setting the collateral limit at 1 kg of gold and 10 kg of silver, the policy effectively establishes a 10-to-1 silver-to-gold reference ratio in collateral lending. This differs significantly from the global market's current ratio, which is much higher.
Why this is happening
This policy shift comes amid several converging factors:
- High domestic demand: India is one of the world's largest consumers of silver, driven by both cultural traditions and industrial needs.
- Growing industrial use: Silver is a crucial component in advanced technologies like solar panels, electric vehicles, and 5G infrastructure. India's expanding technology and renewable energy sectors are creating strong industrial demand for the metal.
- Geopolitical and economic trends: In response to geopolitical tensions and global economic uncertainty, some countries are diversifying their reserves away from traditional fiat currencies like the U.S. dollar by increasing their precious metals holdings. This broader trend has led to a renewed appreciation for silver's dual role as a commodity and monetary asset.
- Increased financial inclusion: By including silver, a more accessible asset for many households than gold, India is broadening financial access. This leverages household savings, especially in rural areas, by making a widely held asset class bankable.
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