“Silver’s rapid decline – down nearly 8% from its record peak – underlines its role as a quick gauge of global risk,” said Aamir Makda, commodity and currency analyst at Choice Broking. “The sudden ‘Davos de-escalation’, marked by the withdrawal of tariff threats against European allies and a new NATO framework for the Arctic, has punctured the geopolitical bubble that drove the white metal to $95 an ounce.”Makda said Thursday’s steep decline reflected profit-taking by investors after precious metals rose recently amid perceived risks to global trading volumes.
“While industrial demand for AI and green technology remains a long-term floor, the immediate evaporation of the ‘trade war premium’ has triggered a massive wave of profit-taking as investors return to a rising stock market,” he said.
Rise and fall
According to the India Bullion & Jewelers Association (IBJA), silver prices on January 1 stood at ₹2.29 lakh per kg for private buyers without 3% Goods & Services Tax (GST). This rose to an all-time high of ₹3.2 lakh per kg on January 21.
Jewelers said price volatility is keeping consumers away from the precious metals.
Suvankar Sen, managing director of listed jewelery company Secco Gold & Diamond, said: “Consumers are waiting on the sidelines as the precious metals remain volatile. Those who have weddings in the family are buying lightweight gold jewellery. Over the past few days, we have seen people buying 5 gram and 10 gram silver coins as prices rose.”
Sen added that every dip is an opportunity to buy gold and silver as prices will move north this year. Varghese Alukkas, managing director of Jos Alukkas, which has 65 outlets in the southern states of the country, added: “Footfall has dropped today as prices fell. People have gone on hold.
Navneet Damani, Head of Research (Commodities) at Motilal Oswal Financial Services, added: “Silver has delivered sharp outperformance in a short period of time, and with the gold-silver ratio now nearing lower levels, the near-term risk reward becomes more favorable for gold.
While we remain positive on both metals and silver, there remains longer-term upside potential, supported by industrial demand and tight physical market conditions, but the recent rally has also increased short-term volatility. At this stage, a higher allocation to gold can help manage fluctuations while maintaining precious metals investments.
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