Silver prices witnessed a sharp selloff on the Multi Commodity Exchange (MCX) today, falling over 10% in a single session, mirroring heavy losses seen in the global bullion market. The steep decline comes after silver failed to sustain a brief rebound earlier this week, triggering fresh selling pressure across international and domestic markets.
The primary trigger for today’s crash was a sharp fall in global silver prices, where the metal dropped as much as 8.5% to around $80 per ounce. The decline snapped a two-day recovery and signalled that selling pressure in precious metals remains strong amid heightened volatility. With India being largely dependent on imports for silver, any sharp movement in global prices quickly reflects on MCX futures.
Another major factor weighing on silver prices was the strengthening of the US dollar. The dollar gained after hawkish signals from the US Federal Reserve, with policymakers indicating caution over the pace of interest rate cuts. Expectations that US rate reductions may be slower than earlier anticipated reduced the appeal of non-yielding assets such as silver, accelerating the selloff.
Investor sentiment was further impacted by discussions surrounding Kevin Warsh’s nomination as the next Federal Reserve chair. Market participants believe Warsh favours a smaller Federal Reserve balance sheet and may be less supportive of aggressive rate cuts. This outlook reinforced expectations of tighter financial conditions, putting additional pressure on precious metals.
Geopolitical developments also played a role in today’s decline. Safe-haven demand eased after the United States and Iran scheduled a fresh round of talks for Friday. While the scope of discussions remains uncertain, easing geopolitical tensions reduced the urgency for investors to hold defensive assets like silver. Tehran has stated it wants talks limited to its nuclear programme, while Washington aims to include issues related to ballistic missiles, regional militant support, and human rights.
On MCX, the sharp correction was amplified by profit booking and long unwinding, especially after silver prices failed to hold recent recovery levels. As global cues weakened, traders rushed to cut positions, leading to an accelerated fall in domestic futures prices.
Overall, silver’s more-than-10% fall on MCX today reflects a combination of global price weakness, a stronger dollar, hawkish central bank expectations, easing geopolitical risks, and aggressive selling after a failed rebound. With volatility remaining elevated, silver prices are likely to continue reacting sharply to global macroeconomic and geopolitical developments.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. 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.
