Silver prices declined sharply in early Tuesday trade (Feb 17), mirroring weakness in global markets.
On MCX, silver futures were trading at Rs 2,35,273 per kg, down Rs 4,618 or 1.93% as of 09:07 am.
Why silver is falling
The decline comes as spot silver dropped nearly 2% to around $76 per ounce globally, extending its three-week correction phase.
The recent pressure is largely due to:
- Subdued liquidity in Asia, with markets in China, Hong Kong and other regions shut for holidays.
- A reversal of the January speculative rally, when Chinese traders drove silver to record highs above $120 per ounce.
- Subsequent unwinding of leveraged positions, which dragged prices down to nearly $64 earlier this month.
After that steep correction, silver had rebounded nearly 3% on Friday following softer-than-expected US inflation data. However, Tuesday’s weakness reflects profit-taking and cautious positioning ahead of key US economic cues.
Focus shifts to Fed signals
With US markets back open, traders are now watching:
- Federal Reserve meeting minutes
- Core PCE price index data
Markets are currently pricing in a rate cut in July, with a possibility of a June move. Any shift in rate-cut expectations could drive the next major move in precious metals.
For now, silver remains under pressure amid thin liquidity and lingering volatility after January’s sharp swings.