Silver plummets during the biggest one-day fall of the year; gold falls

Kolkata: Silver prices registered the biggest one-day decline since the start of this calendar year, breaking a two-day recovery and marking a sharp pullback after a recent runaway rally. Spot prices of the precious metal fell by ₹30,000 per kg to ₹2,52,232 on Thursday.Gold too fell by ₹3,000 per 10 gram to ₹1.53 lakh. Renewed selling pressure returned to the precious metals market as many investors turned to profit booking during times of heightened volatility. In the near term, analysts expect gold prices to remain weak internationally and consolidate between $4550-$5100 per ounce. Silver is expected to consolidate at $74-$91 per ounce. “This decline in silver prices was expected,” said Chirag Sheth, chief South Asia consultant at Metals Focus, a London-based independent precious metals research firm.

Withdrawal not uncommon
“It will recover, but it will take some time. Globally, investors have made gains, which is reflected in the price drop.”

Sheth said that “the silver market squeeze continues, with silver held in New York vaults not being released for fear that US President Donald Trump could impose a sudden tariff on silver consuming countries.”

He predicted that “silver volatility will now continue.” “But for gold, fundamentals remain strong and we remain bullish on the yellow metal.”

The latest fall in gold prices has created new demand for the yellow metal among jewelers and investors alike, said Harshad Ajmera, managing director of JJ Gold House. “The craze is more focused on gold than silver,” he said.

Analysts say the current consolidation phase is not unusual for precious metals, especially after recent extended rallies. Instead, such pullbacks often help reset positioning and improve the quality of the next trend, they said.

“Central bank purchases and ETF inflows continue to absorb a significant portion of global gold supply, creating a strong foundation for long-term demand,” said Vijay Kuppa, CEO of InCred Money. “At the same time, persistent geopolitical uncertainty and macro risks keep the safe haven narrative relevant even as flows ebb in the near term.”

Industry demand exceeds supply
Demand for silver from technology, electronics and renewable energy continues to exceed supply, creating persistent structural shortages. This has not only made silver more volatile than gold, but also more sensitive to global growth and energy transition themes.
To be fair, there are still near-term headwinds for precious metals. A strong rally in global equities could temporarily reduce demand for safe havens. Additionally, if the U.S. Federal Reserve delays or pauses rate cuts, higher real interest rates could limit the upside in precious metals for a period of time, Kuppa said.

Analysts underlined that timing the perfect bottom in gold or silver rarely works for investors. Instead, diversified investments or SIP-style allocations can help increase average entry prices and reduce timing risk.

Investors should focus less on daily price movements and more on fundamental factors such as inflation trends, currency weakness and geopolitical risks, they said.