After reaching record highs, silver prices are now facing a big decline, which has increased the concern of investors. Silver has fallen to around ₹2.5 lakh per kg on the Multi Commodity Exchange of India (MCX). Earlier, it had reached a historic high of ₹4.20 lakh per kg. Since that record high, prices have continued to fall due to profit-booking and global pressure. Currently, it is trading in the range of ₹2.30 lakh to ₹2.70 lakh per kg.
Why are investors worried?
The biggest question in the minds of investors is whether silver prices will fall further or whether they can go back up. There are several big reasons behind the recent decline: Strong US economic data has reduced the chances of an interest rate cut any time soon. When expectations of a rate cut are low, the dollar strengthens.
Due to the strengthening of the dollar, silver becomes more expensive in the international market, because its price is in dollars. This affects global demand and puts pressure on prices. After reaching record highs, big investors and traders started booking profits. When there is a massive selloff, prices fall rapidly. COMEX silver prices fell sharply after reaching a record high of $121 in the international market. This had a direct impact on the sentiment of the Indian market.
What could happen next?
Market experts believe that due to the strong dollar and global uncertainties, there may be pressure on silver in the short term. In the long term, industrial demand for silver (especially from solar and electronics sectors) is expected to remain strong, which could provide support to prices. However, the recent decline has been greater than average, which shows that the market is currently going through a period of ups and downs. This may be a time for investors to be cautious and move forward with a long term strategy.
