Silver prices on the Multi Commodity Exchange (MCX) fell sharply on Friday, January 30, with the continuous silver futures contract sliding over 5% to around Rs 3.78 lakh per kg, extending the correction from this week’s record highs.
The decline in domestic prices mirrors a pullback in global markets and follows an exceptionally strong rally over recent weeks.
Global silver cools after record run-up
International silver prices retreated about 4% toward the $110 per ounce level on Friday after briefly hovering near all-time highs earlier in the week. The pullback came as investors locked in profits following a near-parabolic rally. Despite today’s fall, silver is still up more than 50% in January, marking its strongest monthly performance on record and extending gains for a ninth straight month.
Profit booking after extreme rally
Silver had surged aggressively in both global and Indian markets, supported by safe-haven demand, supply tightness, and strong momentum buying. After such a steep rise, traders moved quickly to book profits, triggering selling pressure across futures markets.
Dollar rebound adds pressure
A modest rebound in the US dollar also weighed on precious metals. A firmer dollar typically pressures commodities priced in dollars, making them more expensive for non-dollar buyers and encouraging short-term selling.
India premium unwinds
In recent sessions, MCX silver had been trading at a steep premium to global prices. As international prices cooled, this elevated domestic premium began to compress, leading to a sharper correction on MCX compared with overseas markets.
Volatility remains elevated despite strong fundamentals
The broader rally in silver has been driven by geopolitical and economic uncertainty, tight physical supply, and robust investment and industrial demand. Comments from Donald Trump, including expectations around his announcement of a nominee for US Federal Reserve chair, have also kept markets volatile. However, after such an intense run-up, sharp pullbacks are common as leveraged positions unwind.
Overall, today’s decline reflects profit booking and short-term market adjustments, rather than a fundamental shift in the longer-term trend, with volatility expected to remain high in the near term.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock and commodity market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
