Central banks add 65 tons of Gold in October as Silver surge fueled by India and industrial demand

Silver’s meteoric rise in recent months is being powered not by speculative trading but by unprecedented physical demand—particularly from India—that the global mining industry is unable to satisfy quickly.

According to veteran mining executive Phil Baker, this surge has flipped traditional market dynamics, placing the physical silver market firmly in the driver’s seat for the first time in decades.

India has emerged as a central force in this demand boom, importing around 60 million ounces of silver in October alone, quadruple the volume from a year earlier, even as silver trades near record highs in local currency.

This hunger for silver has prompted aggressive sourcing globally, with some shipments even transported by air due to the urgency.

Beyond India, rising industrial demand globally—especially from sectors like solar, electronics, and automotive—is changing the game.

Industrial applications now account for over half of silver’s global use, and manufacturers are shifting from “just-in-time” inventory to securing long-term supplies amid rising prices and tightening availability.

The U.S. has also played a major role, with steady investor demand for silver bars and coins over the past 15 years.

Many of these holdings are now seen as long-term assets, passed down through generations rather than sold off, further constraining available supply.

This shift in demand is taking place against the backdrop of a persistent supply deficit—ongoing for five years and expected to hit up to 200 million ounces this year alone.

With mine development timelines stretched to a decade or more due to regulatory delays, new supply is not expected to materialize soon.

Recycling, meanwhile, remains limited and insufficient to close the gap.

Such tight conditions could lead to repeated market squeezes and a permanent rise in required silver inventory across key markets.

The balance will increasingly rely on existing silver held by individuals, funds, and institutions.

On the gold side, the yellow metal is holding strong due to global economic uncertainty, rising debt levels, and expectations of falling interest rates.

Gold is expected to remain well supported, even with possible short-term pullbacks, as central banks and private investors seek refuge from volatility and geopolitical risks.

Supporting this thesis, central banks had their strongest month of the year for gold purchases in October, led by countries like Poland, Brazil, and Uzbekistan.

Global central bank purchases in October were 53 tonnes in total.

These purchases are viewed as strategic moves, particularly among emerging markets looking to reduce reliance on the U.S. dollar.

Looking ahead, both gold and silver appear poised for further gains, driven by structural demand shifts, constrained supply, and a complex macroeconomic environment where physical assets are once again in high demand.