MCX Silver Prices Attempt Recovery Following Historic January Plunge
Silver prices on the Multi Commodity Exchange (MCX) are showing signs of recovery after experiencing a dramatic and historic decline in late January that erased nearly half of the gains accumulated during a prolonged rally. The March delivery contract for silver has demonstrated resilience, climbing by ₹37,213 per kilogram over the course of eight consecutive trading sessions leading up to Wednesday. This upward movement has brought the price to a level of ₹2,63,018 per kg, marking a significant rebound from recent lows.
Context of the Recent Volatility and Record-Breaking Rally
Despite this encouraging recovery, the current silver prices remain substantially lower than the all-time peak recorded earlier. The market is still down by a staggering ₹1,57,000 from the record high of ₹4,20,048 per kg, which was achieved on January 29. This correction comes after a period of exceptional performance for the precious metal. Throughout 2025, silver had been on a remarkable bull run, gaining approximately 170% on the MCX platform.
The initial surge was fueled by a confluence of factors including heightened safe-haven demand amid global uncertainties, widespread anticipation of interest rate cuts by the US Federal Reserve, and increasing industrial consumption. Additionally, the rally was amplified by substantial speculative trading activity, leveraged positions in the market, and options-driven strategies that contributed to the upward momentum.
Factors Influencing the Current Market Dynamics
Compared to its counterpart gold, silver operates within a significantly smaller market framework, a characteristic that inherently magnifies price volatility and can lead to more pronounced swings in both directions. Recently, several of the supportive tailwinds that propelled the earlier rally have begun to dissipate. Key among these are the easing of geopolitical tensions in certain regions, a strengthening US economy that has tempered expectations for aggressive Federal Reserve rate cuts, and the nomination of Kevin Warsh as the next Chair of the US Federal Reserve.
These developments have collectively contributed to a notable appreciation in the US dollar index. A stronger dollar typically exerts downward pressure on dollar-denominated commodities like silver, making them more expensive for investors holding other currencies. Despite these headwinds, both silver and gold continue to trade at elevated levels when viewed against their historical averages, reflecting the substantial gains accumulated over recent months.
Mixed Signals from US Economic Data
Concurrently, the latest employment data from the United States has presented a nuanced and somewhat contradictory picture. The US economy added 130,000 jobs in the month of January, a figure that comfortably exceeded analyst forecasts of 75,000 new positions. Furthermore, the unemployment rate showed improvement, easing to 4.3%.
However, in a significant revision that has captured market attention, the Bureau of Labor Statistics reported that the total number of jobs added throughout the entirety of 2025 was only 181,000. This figure stands in stark contrast to the previously reported total of 584,000, as indicated by various media reports. This substantial downward revision introduces an element of uncertainty regarding the underlying strength of the labor market.
Expert Analysis on Silver Price Trajectory and Sustainability
Market analysts and industry experts are closely monitoring the situation to assess whether the recent price recovery can be sustained or if further corrections are imminent.
Technical Perspective and Support Levels
Ponmudi R, the Chief Executive Officer of Enrich Money, provided a detailed technical assessment. He observed that MCX silver futures are currently trading within the ₹2,50,000 to ₹2,70,000 price zone, following a sharp correction from the record highs near ₹4,20,000. While the long-term bullish market structure for silver remains fundamentally intact, prices have recently slipped below several key moving averages. This technical development suggests that short-term corrective pressures are still active in the market.
He identified a strong support band for silver between ₹2,25,000 and ₹2,60,000, which aligns with previous structural bases established in the market. According to his analysis, a sustained hold above this critical support region, followed by a decisive and convincing recovery, could potentially trigger renewed upward momentum. Such a move might propel prices toward the ₹3,00,000 to ₹3,25,000 range.
"Dips towards the identified support levels may continue to present accumulation opportunities for positional participants and long-term investors," Ponmudi R stated. "However, a decisive and sustained breakdown below this crucial support zone could extend the current correction phase further."
Range-Bound Consolidation and Cautious Optimism
Hareesh V, Head of Commodity Research at Geojit Investments Limited, offered a similarly cautious yet analytical viewpoint. He indicated that the technical picture for silver is increasingly appearing range-bound, with prices likely to consolidate within a relatively tight band near current levels for the foreseeable future. Momentum indicators remain muted and lack strong directional signals, suggesting a period of sideways movement until a clear breakout above resistance or a breakdown below key support materializes.
The expert characterized the recent rebound as more indicative of a technical recovery within a broader corrective phase rather than a definitive trend reversal. "While the current bounce may extend somewhat further, it is unlikely to challenge the recent record highs in the immediate term," he noted. "Prices are expected to consolidate within a narrow range in the short run, but the broader fundamental backdrop for silver remains bullish over the longer horizon."
Disclaimer: The views, analyses, and investment recommendations expressed above are those of individual analysts or broking companies and are provided for informational purposes only. They do not represent the official stance of any news organization. Investors are strongly advised to consult with certified financial experts and conduct their own due diligence before making any investment decisions in the commodities market or any other financial instrument.
