Silver ETFs trading at a premium as prices soar

THE record rally in silver prices has driven its digital counterpart — exchange-traded funds (ETFs) — to trade at a steep premium of 5-12%, thanks to the surge in prices coupled with festive buying, strong central bank demand, and muted mining activity leading to short supplies.

- BENN KOCHUVEEDAN @ Mumbai

This shortage and excess demand have spilled over into ETFs, which are now trading at a 5-12% premium over the converted imported prices inclusive of customs duty and GST. According to a report by Axis Mutual Fund, this confluence of factors has pushed total silver ETF holdings in the country to roughly 1.13 billion ounces, worth over $40 billion by mid-2025. Silver prices have surged with returns of 65% so far this year, outpacing gold, which has rallied about 55% in the same period.

On October 8, safe-haven demand saw gold and silver prices shatter records, breaching psychologically significant levels of $4,000 per ounce globally. Spot gold touched $4,020/oz, gold futures hit $4,070/oz, silver futures breached the $50/oz mark, and spot silver stood at $48.44/oz.