Silver’s price took a dramatic turn, sliding more than 8% in a single day after hitting an all‑time high.
Record Rally Followed by a Sharp Fall
On Monday, December 29, silver reached a record ₹254,174 per kilogram on Indian markets. By the end of the day, the price fell to about ₹224,429 per kilogram, an 8% drop.
What Fueled the Rapid Rise?
Experts say the rally was not just hype but a sign of deeper changes:
- Physical scarcity: While Western markets were closed for the holidays, Asian traders kept buying, pushing spot prices in Shanghai above $82 an ounce.
- New demand from technology: Silver is a key material for solid‑state batteries, which could replace lithium‑ion batteries. It’s also needed for electric vehicles and solar projects.
- Safe‑haven appeal: Geopolitical worries, especially the war in Ukraine, made investors turn to silver as a protective asset.
Why the Price Dropped So Fast?
Several factors caused the sudden pull‑back:
- Traders rushed to lock in profits after the steep rise.
- Margin requirements were raised on the Chicago Mercantile Exchange, prompting some short‑term sellers.
- Talks between the United States and Ukraine about a possible peace deal reduced the safe‑haven demand.
What Might Happen Next?
Some analysts still see upside potential. They point to a breakout above ₹232,000‑₹235,000 per kilogram and suggest the next target could be around ₹240,000‑₹250,000 per kilogram if demand from batteries and renewable energy stays strong.
Bottom Line
Silver showed how quickly a commodity can swing on news, profit‑taking, and global events. While the recent drop may feel unsettling, the underlying supply‑demand story could keep the metal in focus for investors.
Remember, this is just an overview, not a prediction. Do your own research or talk to a financial advisor before making any investment decisions.