Silver Prices Surge as Dollar Weakens Amid Global Tensions in February 2026

Breaking: Silver Prices Surge as Dollar Weakens Amid Global Tensions in February 2026

The global commodities market witnessed a significant uptick in silver prices, with the precious metal recently surging by over 6% on the Multi Commodity Exchange (MCX) in India. This sharp rally, pushing MCX silver futures to around ₹2,52,579 per kilogram as of February 23, 2026, comes as the US Dollar continues its downward trajectory, alongside a volatile mix of trade disputes and escalating geopolitical tensions worldwide. Indian investors are keenly watching as silver, often considered gold's more volatile cousin, demonstrates its strong safe-haven appeal and industrial prowess in uncertain times.

The Catalyst

The primary drivers behind silver's renewed ascent are multifaceted. A weakening US Dollar (DXY), which measures the greenback against a basket of major currencies, has been a significant tailwind. The DXY fell to 97.4309 on February 23, 2026, marking a 0.37% decline from the previous session and an 8.60% drop over the last 12 months. This depreciation makes dollar-denominated commodities like silver more affordable for international buyers, thereby boosting demand. Key factors contributing to the dollar's vulnerability include expectations of Federal Reserve rate cuts in 2026, policy uncertainty, and signals from the US administration favoring a weaker currency.

Compounding this monetary shift are mounting geopolitical tensions. Conflicts in the Middle East, including rising tensions with Iran, and the ongoing Russia-Ukraine war, continue to fuel demand for safe-haven assets. Furthermore, renewed global trade uncertainty, exacerbated by recent US Supreme Court rulings on tariffs and subsequent announcements by the US President regarding new import duties, has injected considerable volatility into markets. This unpredictable policy landscape prompts investors to seek refuge in tangible assets like silver.

Financial Forensics

Silver's price dynamics in early 2026 reflect a complex interplay of supply-demand fundamentals and macroeconomic forces. The metal had a highly volatile start to the year, initially surging past US$100-120 per ounce in January before experiencing corrections. However, its resilience has been notable, with recent movements showing strong recovery. On the MCX, silver futures for March 2026 have been trading robustly, reflecting global cues.

Beyond short-term fluctuations, the structural deficit in the global silver market provides a fundamental underpinning for higher prices. The market is projected to face its sixth consecutive annual deficit in 2026, meaning demand continues to outstrip supply. This deficit is primarily driven by years of underinvestment in mining and consistently strong industrial consumption.

Key Silver Price Movements (February 2026 - IST)

Metric	Price (Approx.)	Date/Context	Source
MCX Silver Futures (March)	₹2,52,579/kg	Feb 23, 2026	The Economic Times
COMEX Spot Silver	US$82.34/ounce	Week ending Feb 22, 2026	Times of India
DXY (Dollar Index)	97.4309	Feb 23, 2026	Trading Economics
Intra-week Surge	+5.62% (Comex)	Week ending Feb 22, 2026	Times of India
India (1kg high)	₹3,05,000	January 19, 2026	Goodreturns

Source: FinScann Research, based on cited reports as of February 23, 2026

Industrial demand remains a crucial component of silver's valuation. The metal's exceptional electrical conductivity makes it indispensable in solar photovoltaic (PV) systems, electric vehicles (EVs), semiconductors, artificial intelligence (AI) data centers, and 5G technology. While some thrifting (reduction in silver content) is anticipated in the PV sector, overall industrial consumption continues to act as a strong structural anchor for prices. Furthermore, robust physical investment demand, particularly from India, coupled with significant Exchange Traded Fund (ETF) inflows, has further tightened available supply and contributed to price appreciation.

Market Impact

The surging silver prices have a notable impact across Indian markets. For investors, it reinforces the role of precious metals as a hedge against inflation and geopolitical risks. Companies heavily reliant on silver as an industrial input, particularly in electronics, solar energy, and automotive sectors, might face increased production costs. However, for those with existing silver stockpiles, the rising prices represent a significant appreciation in asset value. The volatility in silver, more pronounced than gold, also creates opportunities for nimble traders on platforms like MCX, but necessitates careful risk management.

Key Takeaways for Investors

• Diversification: Silver's dual role as a precious and industrial metal makes it a powerful diversifier in an uncertain economic and geopolitical landscape.
• Safe-Haven Appeal: Persistent global tensions and currency weakness amplify silver's safe-haven characteristics, offering protection against broader market instability.
• Industrial Tailwinds: The long-term growth trends in green energy (solar, EVs) and advanced electronics continue to drive structural demand for silver, supporting its value.
• Volatility Management: While offering higher upside potential than gold, silver's inherent volatility requires investors to adopt a disciplined approach to entry and exit points.
• India-Specific Demand: Strong domestic investment demand and cultural significance in India add an additional layer of support to silver prices.

FinScann Verdict

FinScann analysis suggests that silver's recent surge is more than just a fleeting rally; it reflects fundamental shifts in global economics and geopolitics. With the US Dollar facing sustained pressure and global uncertainties persisting, silver's appeal as both a store of value and an essential industrial commodity is set to remain strong. While volatility is expected, strategic investors may find compelling opportunities in silver's current trajectory.

What is driving the current surge in silver prices? A: The current surge in silver prices is primarily driven by a weakening US Dollar, escalating geopolitical tensions (such as those in the Middle East and renewed trade uncertainty), and persistent structural supply deficits in the global market. Strong industrial demand for silver in sectors like solar and electronics also provides significant support.

What is the expected silver price range in India for 2026? A: Most expert forecasts for silver prices in India for 2026 range widely, with some projections placing them between ₹2.4 lakh and ₹3.5 lakh per kilogram, depending on industrial demand and global market conditions. Some optimistic estimates even project levels as high as ₹4.6 lakh by year-end.

How does the weakening US Dollar affect silver prices? A: Silver is primarily priced in US Dollars. When the US Dollar weakens, it generally makes silver more affordable for buyers holding other currencies, thereby increasing demand and typically leading to higher silver prices.

Is silver a better investment than gold in the current market? A: Silver often exhibits higher volatility than gold, offering potentially greater upside but also increased risk. In 2025, silver significantly outperformed gold due to strong industrial demand and its perceived undervalued status. While both benefit from safe-haven flows, silver's strong industrial applications provide an additional demand driver that gold lacks to the same extent. The choice depends on an investor's risk appetite and investment horizon.

Disclaimer: For information only; not investment advice. Stock market investments carry risks. Please consult a SEBI-registered advisor before investing. FinScann assumes no liability for decisions made based on this report.