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Silver prices on the Multi-Commodity Exchange (MCX) saw a sudden change in market trend on Monday. The metal rallied to a record high price point, resulting in massive sales across the bullion market.
The MCX Silver March futures fell by almost Rs. 21,000 in an hour during the afternoon trade as investors opted to lock in their gains. The contract touched an intraday low of approximately Rs. 2.33 lakh per kg, which is considerably lower than the Rs. 2.54 lakh/kg rates from the morning session.
This sharp drop comes after a bullish rally, where Silver surged close to 181%, outperforming gold. The price was driven by tightening global supply, depleted inventories, rising industrial demand, and increased investor interest after the metal was classified as a critical mineral in the US.
Experts observed the rates reaching overstretched levels, which triggered a sudden profit-unloading. Downtrends accelerated as reports of successful peace talks between Donald Trump and Volodymyr Zelensky emerged, reducing geopolitical concerns and, in effect, the demand for safe-haven precious metals.
Globally, silver experienced sharp fluctuations, touching $80 per ounce and then rolling back below $75/ounce.
The margin increase announced by the Chicago Mercantile Exchange (CME) has created further pressure. CME increased the initial requirement for March 2026 silver contracts from $20,000 to $25,000.
When margin demands are increased, it often leads to reduced portfolios by leveraged traders, further pushing the prices lower. This trend saw gold prices slipping along with other precious metals amid profit-booking and reduced demand related to geopolitical risks.
Also Read: What Is the Silver Price Prediction for 2026? Full Forecast
While there was a sharp correction, some analysts believe the overall outlook is still positive. According to Jigar Trivedi, a senior research analyst at Reliance Securities, “Rs. 2.4 lakh per kg is emerging as a crucial support level.”
US financial services firm BTIG pointed out how the “rally has become parabolic, a characteristic that has always resulted in sharp corrections and not a traditional decline.” With silver now being, it is close to 89% above its 200-day moving average - a level that has always marked big sell-offs.
Market experts warn that history has been quite sobering: in 1980 and 2011, silver prices plummeted by 75% to 90% after strong moves. Since then, prices have increased by several multiples from the lows that came after the COVID pandemic.
Disclaimer: The views and opinions expressed by experts concerning the stock market, investment, and money management tips are their own and do not reflect the opinion of Analytics Insight.
