Silver prices hit the lower circuit on the Multi Commodity Exchange (MCX) on Wednesday after a sharp sell-off, following a strong rally that had pushed prices to record highs earlier this week.
MCX silver contracts across key maturities declined by the maximum permitted 6%, reflecting heavy profit booking. The March 2026 silver contract was trading around Rs 2.35 lakh per kg, down nearly Rs 15,000, while similar losses were seen in SilverM and SilverMIC contracts, which also slipped to the Rs 2.37 lakh per kg zone.
What triggered the fall in silver prices?
The sharp correction comes just a day after silver prices touched a record high of Rs 2.41 lakh per kg in the domestic market, driven by firm global cues and strong industrial demand. The sudden reversal is largely attributed to profit-taking after a steep run-up, coupled with exchange-imposed circuit limits to curb excessive volatility.
Market participants noted that while the broader trend remains supported by fundamentals, the pace of gains had become unsustainable in the short term, leading to a technical correction.
Gold also sees pressure
Gold prices continued to weaken alongside silver. Gold of 99.9% purity fell Rs 2,800 to Rs 1,39,000 per 10 grams, extending losses for the second consecutive session, even as global prices remained elevated.
Global market cues remain strong
In international markets, spot silver was trading higher at around USD 75.85 per ounce, while gold hovered near USD 4,401 per ounce. Analysts continue to highlight strong industrial demand for silver, particularly from solar, electronics and data centre infrastructure, as well as structural supply constraints, as long-term supportive factors.
Big-picture trend
Despite the sharp intraday fall, both gold and silver are heading towards their strongest annual gains since 1979. Gold prices have surged over 60% this year, while silver recently touched an all-time high of USD 83.62 per ounce, underscoring the intense volatility seen across precious metals toward the year-end.
Market experts caution that near-term volatility may persist, especially amid margin changes and year-end positioning, even as the long-term outlook remains constructive.
