If you tried buying silver contracts on the Multi Commodity Exchange (MCX) today and noticed that prices weren’t moving or orders weren’t getting executed — MCX isn’t down and it’s not a technical glitch. What actually happened is that silver hit its upper circuit limit, causing trading to temporarily freeze after prices surged 4% across all major contracts.
Contracts including SILVER1!, SILVERM1!, SILVERMIC1!, and SILVER2! were locked around Rs 1,60,830 per kg, with no sellers available in the market. This is a standard exchange mechanism that halts trading when prices hit their daily maximum movement band, preventing excessive volatility.
Such a freeze means that the buying side remains active, but trades cannot go through because there are no matching sell orders at or below the circuit price. Importantly, this is not a system error — it’s how the market automatically stabilizes when demand outpaces supply sharply.
In certain cases, MCX may decide to revise the circuit limit to allow prices to move further. If that happens, pending buy orders already placed can be executed automatically once the new limit is applied, provided matching sell orders appear.
Adding to the situation, MCX has increased margin requirements by 1% on gold and 1.5% on silver to manage risk amid heightened volatility and global shortages. The exchange stated that “backwardation between futures and spot prices” in global markets — where spot prices are higher than futures — is being mirrored in India due to strong investment, industrial, and festive demand.
The near-month 30 kg silver contracts expire on December 5, while 5 kg and 1 kg contracts expire on November 28, with settlements through physical delivery. The exchange and its clearing house are monitoring market conditions closely and may take additional measures if needed.
So, if your MCX trading screen looks frozen, it’s not a crash — it’s a circuit freeze. Trading can resume if MCX revises the circuit band, allowing those pending orders to go through.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Commodity trading involves risk. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
