The crisis comes just days after a historic squeeze on the London silver market pushed prices past the record high set in 1980, during the infamous Hunt brothers’ corner-cutting attempt. Spot rates had risen above New York futures, prompting physical shipments of the metal to London to ease the shortage. But as the rally overloaded technical indicators, the white metal’s advance lost momentum, with macro jitters and a resurgent dollar pulling the rug from under prices.
On the MCX, silver fell ₹327, or 0.22%, to ₹1,50,000 per kg during the Muhurat trading session, and with markets closed till Wednesday morning, prices could be pushed dramatically lower in evening trade. Reflecting a shift in sentiment, the Aditya Birla Sun Life Silver ETF Fund of Fund said it will resume new subscriptions from October 23, after weeks of suspension, as ETFs move from inflated premiums to trading at discounts to global benchmarks, in a clear sign of normalization after speculative excesses.
The latest slump follows two consecutive sessions of heavy declines in gold and silver, triggered by US President Donald Trump’s comments that a meeting with his Chinese counterpart may not happen anytime soon, dashing hopes for an early easing of trade tensions. The rally in precious metals was based on a cocktail of rate cut expectations, a weaker dollar, falling bond yields and central bank buying, compounded by port demand and fear of missing out.
Still, analysts caution that the corrective pressure should not obscure silver’s underlying strength. According to Motilal Oswal, prices could consolidate in the $50-55 per ounce range in the near term but could rise to $75 by 2026 and $77 by 2027 on COMEX – levels that translate to around ₹2.4 lakh per kg domestically, assuming a USD-INR rate of 90. Bank of America also maintains a bullish stance and is raising its silver target to $65 per ounce, even as it forecasts demand will fall 11% next year, due to persistent structural supply shortages.
Motilal Oswal’s long-term outlook underlines that this correction could be a pause in an ongoing uptrend. It expects a persistent global supply shortage in 2025 for the fifth year in a row, driven by robust industrial demand for green technologies such as solar energy and electric vehicles. That structural tightness could create a lasting floor for silver prices, according to the report, distinguishing this rally from the speculative outbursts of 1980 and 2011.
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