Silver Faces Volatility as Global Markets Reprice Risk

Silver prices have come under sharp pressure after a historic rally, unsettling investors who had grown accustomed to near one-way gains. On the Multi Commodity Exchange (MCX), silver futures slipped to around ₹2,37,000–₹2,38,000 per kg, after closing at ₹2,32,723 in the previous session. The metal has fallen nearly ₹18,000 from its record high of ₹2,54,174 per kg, reflecting a steep correction driven by global cues.

The sudden decline has pushed volatility higher and raised questions over whether the rally has peaked. Market experts, however, see the move as a technical correction rather than a structural reversal. They also caution that volatility could persist this week as U.S. and other major global markets remain partially closed for New Year holidays, limiting liquidity. A clearer trend is expected once global markets reopen fully next week.

According to Ponmudi R, CEO of Enrich Money, the fall is driven by short-term factors such as higher margin requirements, forced deleveraging, year-end tax harvesting, and thin trading volumes. These factors amplified selling pressure as leveraged traders rushed to cut exposure.

From a technical perspective, silver is finding support near its rising channel and the 20-day moving average. If MCX prices hold above ₹2,36,000, a rebound toward ₹2,45,000–₹2,60,000 is possible. A decisive break below support could extend the correction.

The weakness mirrors global markets. On COMEX, silver plunged over 7% in a single session, sliding from $82–$84 per ounce to around $72–$72.30. Analysts attribute the sell-off to tighter margin norms imposed by the Chicago Mercantile Exchange (CME), triggering forced unwinding.

Despite near-term volatility, experts advise caution over panic. Industrial demand and supply constraints continue to support silver’s longer-term outlook, making staggered accumulation on dips a prudent strategy for long-term investors