Shares of Hindustan Zinc came under heavy selling pressure, falling over 11% in trade after silver prices witnessed an unprecedented sell-off on the Multi Commodity Exchange (MCX). Silver contracts hit the 12% lower circuit, sliding by nearly ₹50,000 per kilogram in a single session, marking one of the sharpest intraday declines seen in recent times.
The sharp fall extended the ongoing correction in precious metals after silver had surged to record highs earlier this week. Following a near-parabolic rally, silver had emerged as one of the most volatile assets in the commodity space, attracting aggressive momentum-driven participation. However, the rapid reversal caught traders off guard, triggering widespread profit booking across global markets.
Internationally, silver prices had rallied close to the $120 per ounce mark before reversing sharply. The sudden pullback prompted traders to lock in gains after the strong run-up. In India, the correction was sharper as elevated domestic premiums began compressing rapidly once global prices cooled, amplifying the fall on MCX compared with overseas exchanges.
Sentiment in precious metals was further weighed down by speculation around a possible change in leadership at the US Federal Reserve. Markets reacted to reports suggesting that Kevin Warsh could be appointed as the next US Federal Reserve chair. Warsh is widely known as a critic of ultra-loose monetary policy, raising concerns that future policy could turn more restrictive. Expectations of tighter monetary conditions, coupled with a rebound in the US dollar, added to the pressure on silver prices, which typically move inversely to the greenback.
The sell-off also reflected forced unwinding of leveraged positions. Silver had become a crowded trade after months of strong gains driven by safe-haven demand, supply constraints, and aggressive momentum buying. Once prices started slipping, stop-loss triggers and margin pressures accelerated the decline, pushing MCX silver contracts straight to the lower circuit.
