Silver, which outperformed every asset including gold in 2025, has now lost all the gains it had built in 2026. Currently, July Silver futures on the Multi Commodity Exchange (MCX) is trading around Rs 2.41 lakh per kilogram. In 2025, the precious metal had rallied 182 per cent, and an another 85.50 per cent in 2026.
It had touched an all-time high of Rs 4.57 lakh in January this year. Since then, the white metal has seen a sharp and sustained correction, and is now trading below the closing level of 2025, Rs 2.46 lakh. In absolute terms, that's a Rs 2.16 lakh drop.
What's Behind Silver's Downturn
Silver’s fall is mainly due to a mix of global economic and market factors.
A stronger US dollar has been a major reason. Since silver is priced in dollars worldwide, a stronger dollar makes it more expensive for buyers using other currencies, which reduces demand.
Higher interest rates in the US have also hurt silver. The US Federal Reserve’s “higher-for-longer” policy has pushed bond yields up, making government bonds more attractive. Since silver does not give any interest or dividend, investors prefer bonds over it.
Tighter financial conditions have added more pressure. With borrowing costs rising, institutional investors have reduced their silver holdings to manage cash needs or move money into safer, income-earning assets.
Even geopolitical tensions in West Asia have not helped silver this time. Normally, such uncertainty supports safe-haven buying, but this time investors sold metals along with other risky assets to raise cash and reduce exposure.
Further, profit booking has also weighed on the metal. After a strong rally earlier, many traders decided to book profits, which increased selling pressure instead of fresh buying.
Is This Buying Opportunity Or Risk
Silver's sharp reversal has prompted many to wonder whether this is a good time to enter or if there could be more downside risk ahead.
According to Ruchit Thakur, Market Analyst at VT Markets, the metal is currently in what he describes as a “chaotic correction phase rather than a definite uptrend.”
Despite the steep decline, Thakur remains constructive on the long-term outlook, driven by structural demand from green energy and technology sectors. He notes that “long-term demand is high for solar panels, electric vehicles, and artificial intelligence,” while also highlighting the possibility of extended supply constraints.
From a valuation perspective, he adds that “silver may technically be valued at least $85 to $100 in 2026,” suggesting the broader fundamental story remains intact.
However, Thakur cautions that the near-term picture is far from stable. He stresses that silver behaves more like a risk asset than a traditional safe haven, and “prices are now very volatile,” especially in the backdrop of a strong dollar and elevated interest rates.
He further warns that “it can drop more before rising once again,” as macro pressures continue to dominate price action.
On geopolitical triggers, he notes that silver can still react sharply to global tensions, citing recent moves where it surged above $96 after holding support near the $64–$66 zone during West Asia-related uncertainty. At the same time, he adds that when tensions ease, silver often weakens initially as safe-haven demand fades before stabilising again. According to Thakur, accumulation typically returns when macro volatility settles and industrial demand strengthens, with the $64–$67 band emerging as a key demand zone where the metal may attempt to build a base.
