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Silver Prices Plummet on MCX After Hitting Record High
Mumbai: Silver prices experienced a dramatic plunge on the Multi Commodity Exchange (MCX) today, with March futures falling by ₹21,000 per kilogram within a single hour, hitting a low of ₹2,33,120. This sharp decline followed a surge to a record high of ₹2,54,174 earlier in the day.
The volatility in the Indian market mirrored fluctuations in international silver prices. Spot prices initially crossed $30 per ounce, but later retreated below $30 amid profit-taking and reports of potential peace talks between US President Trump and Ukrainian President Zelenskyy.
Analysts attribute the price correction to widespread profit booking after an exceptional 181% surge in silver prices since the beginning of the year, coupled with easing geopolitical tensions. The prospect of a potential peace agreement in the Ukraine conflict has reduced demand for safe-haven assets like silver.
While the overall trend for silver remains positive, experts caution about continued volatility. Jigar Trivedi of Reliance Securities notes the ₹2.4 lakh per kg level as a short-term support. However, BTIG, an American firm, warns that such rapid price increases are unsustainable and could be followed by sharp corrections.
Drawing parallels with historical trends, Manish Banthia of ICICI Prudential Mutual Fund pointed out that previous periods of extreme silver price appreciation, such as in 1979-80 and 2011, were followed by significant crashes of 90% and 75% respectively. Given the near tripling of prices in the past year, experts are urging investors to exercise caution.
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