Silver Prices Plummet 45% in Three Months, Raising Questions About Investing Timing

Silver Prices Plummet by 45 Percent in Three Months

Silver prices have experienced a steep decline, falling by nearly 45 percent from their peak. The metal's domestic futures price surged to a record Rs 4,39,330 on January 29 this year, but closed at Rs 4,24,316 per kilogram on the Multi Commodity Exchange (MCX). This significant drop can be attributed to geopolitical conflict, Fed rate uncertainty, and global tariff tensions.

As of April 28, the metal's price was hovering near Rs 2,37,000, down nearly 2 percent from its previous close. Market volatility induced by the West Asia conflict and an elevated dollar continues to cap the metal's price. Prior to the Iran conflict on February 27, silver prices stood at Rs 2,78,481, up nearly 15 percent from their current level.

Volatility Forces Silver Price to See-Saw

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Commodity analysts estimate that silver is currently in a chaotic correction phase rather than a definite uptrend. The volatility has forced the metal's price to see-saw, with sharp swings. In April alone, the 3-month futures contract prices fell to a low of Rs 2,31,348 on April 7 and peaked at Rs 2,57,142 on April 17, with a price difference of more than Rs 25,000 in just 10 days.

Investor Outlook

Experts agree that investors may chip in to buy silver if they are aware of the risk. Silver can be bought in several ways depending on the investor's needs. Physical silver, such as coins, bars, or jewelry, gives you direct ownership; silver ETFs offer easy exposure and SIP payments, and investing through apps like Paytm allows small investments in metals stored in vaults.

For more active investors, silver futures on MCX offer trading opportunities but carry high risk. Futures trading predetermines the price of silver, with both buyers and sellers agreeing today to trade it at a specified date in the future. The domestic spot silver price on MCX stood at Rs 2,37,523 per kilogram on April 28.

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Analysts advise caution for investors, as silver behaves more like a risk asset than a safe haven during volatile price periods. High interest rates and a strong dollar may cause it to decline, so it can drop more before rising once again. The $64-$67 range seems to be a reasonable demand zone based on the chart. The price may start to increase after the demand zone has been tested.