Silver futures on the Multi Commodity Exchange (MCX) surged around 2% on Friday, tracking a sharp recovery in global bullion prices after heavy selling earlier this week.
MCX Silver futures were trading at Rs 2,41,044 per kg, up Rs 4,609 or 1.95%, in early trade.
1. Bargain buying after steep correction
Globally, spot silver jumped 2.1% to $76.76 per ounce after plunging nearly 11% earlier in the week. The sharp fall had pushed prices to short-term oversold levels, triggering bargain-hunting by investors.
The previous decline was driven by:
- Stronger-than-expected US jobs data
- Reduced expectations of early US rate cuts
- Break below key technical support levels
With panic selling easing, buyers stepped in to accumulate at lower levels.
2. Gold rebound supporting silver
Silver often moves in tandem with gold. On Friday:
- Spot gold rebounded 1% to $4,966 per ounce
- US gold futures rose 0.7%
The recovery in gold sentiment lifted the broader precious metals complex, including silver.
3. Dollar steady, no fresh pressure
The US dollar remained mostly flat. A stronger dollar typically pressures metals, but the absence of further dollar strength helped silver stabilise.
Earlier in the week, strong US data had reinforced expectations that the Federal Reserve may keep interest rates higher for longer. However, investors are now awaiting US inflation data for clearer signals on the Fed’s next move.
4. Short covering in global markets
After a sharp multi-session decline, traders who had built short positions likely booked profits, leading to additional upside momentum in silver.