Silver prices witnessed a sharp fall within a short span on Monday, after touching a record high earlier in the day. March futures on the Multi-Commodity Exchange (MCX) dropped by ₹21,000 per kg in just one hour, falling to a low of ₹2,33,120. At the start of the session, prices had climbed to an all-time high of ₹2,54,174 per kg.
A similar trend was seen in the global market. International silver prices crossed the $80-per-ounce mark for the first time but later slipped below $75. The fall came amid profit booking by investors and reports of possible peace talks between US President Donald Trump and Ukrainian President Volodymyr Zelensky.
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Why silver prices fell
The primary reason behind the sudden decline is profit booking after a steep rally. Since the beginning of the year, silver prices have surged by around 181%, prompting investors to lock in gains. The easing of geopolitical tensions, especially news related to a potential peace deal in the Ukraine war, reduced demand for silver as a safe-haven asset.
Silver prices had been supported by strong fundamentals, including its classification as a critical mineral in the US, limited supply, low inventories, and rising industrial demand. However, the sharp rise also made the market vulnerable to corrections.
Another factor adding pressure was a margin hike announced by the Chicago Mercantile Exchange (CME). The exchange raised the initial margin requirement for the March 2026 silver futures contract to around $25,000, up from $20,000 earlier this month. This change came into effect from today.
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Market outlook
According to reports by ET, Jigar Trivedi, Senior Research Analyst at Reliance Securities, said that while the long-term outlook for silver remains positive, prices are likely to stay volatile. He added that the ₹2.4 lakh level is emerging as an important near-term support for silver prices.
Overall, the sharp correction reflects a broader round of profit booking in the bullion market as easing global risks have weakened safe-haven demand.
