Silver slips below Rs 2.5 lakh/kg: What this price correction means for investors
India Today
After a stunning rally and an equally sharp fall, silver now sits at a crucial crossroads, leaving investors wondering whether this correction is nearing its end or still gathering momentum.
Silver prices extended their decline, slipping below the Rs 2.5 lakh per kg mark on the Multi Commodity Exchange (MCX) and deepening concerns among traders about whether the correction has further to run.
The fall comes after an extraordinary rally that had taken MCX Silver futures close to Rs 4,20,000 at their peak. Since then, prices have retreated sharply and are now trading in the Rs 2,30,000 to Rs 2,70,000 zone, reflecting intense volatility in both domestic and global markets.
So what is driving the drop, and what happens next?
The immediate trigger has been a mix of global factors. Stronger-than-expected US economic data has reduced expectations of early interest rate cuts. When rate cut hopes fade, the US dollar strengthens. A stronger dollar makes commodities like silver more expensive for global buyers, putting pressure on prices.
There has also been heavy profit-booking. After such a steep rally, traders often rush to lock in gains at the first sign of weakness. Once key price levels break, automated selling and stop-loss triggers can accelerate the decline, amplifying the move.
On the global front, COMEX Silver has also corrected sharply from record highs above $121 and is now trading significantly lower, reinforcing bearish sentiment in domestic markets.
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After a stunning rally and an equally sharp fall, silver now sits at a crucial crossroads, leaving investors wondering whether this correction is nearing its end or still gathering momentum.
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