Silver prices in India experienced a dramatic roller-coaster ride on Monday, skyrocketing to a fresh all-time high before crashing under intense selling pressure. The precious metal opened with a bang but finished the session with a staggering loss, offering a sharp reminder of market volatility.
A Meteoric Rise and a Sharp Fall
During early morning trades, silver futures on the Multi Commodity Exchange (MCX) surged to an unprecedented peak of ₹2,54,174 per kilogram. However, this jubilation was short-lived as profit-booking triggered a massive sell-off. The prices plummeted, finally settling near ₹2,24,429 per kg—marking a fall of roughly ₹30,000 from the day's high.
A similar story unfolded in the international markets. The COMEX silver futures contract in the United States touched a new peak of $82.615 per ounce but could not hold the ground. It finished the session approximately $12 per ounce lower than that zenith.
The Root Cause: A Divergence in Markets
Market analysts pinpoint a significant price divergence as the core reason behind the initial surge and subsequent correction. According to experts, while Western markets like COMEX and the London Bullion Market Association (LBMA) were closed for the Christmas holiday, trading continued actively in Asia, specifically on the Shanghai Futures Exchange.
This created a striking imbalance. Physical silver in Shanghai was commanding a premium, trading close to $82 per ounce, while COMEX prices were significantly lower. This highlighted a growing disconnect between paper-based trading and the realities of physical supply and demand.
Sugandha Sachdeva, Founder of SS WealthStreet, explained the situation clearly. "When Western markets went offline, the physical market spoke clearly," she said. "Silver is scarce, inventories are depleted, and buyers are willing to pay a substantial premium for immediate delivery." This premium in Shanghai ultimately pulled global prices, including India's, higher before the correction set in.
Investment Outlook: Correction as an Opportunity
Despite the sharp pullback, market veterans are viewing this correction as a potential entry point for investors who missed the earlier rally. The prevailing advice is to look for buying opportunities at lower levels.
For the Indian market, experts suggest considering 'bottom fishing' if the silver price approaches ₹2,18,000 per kg. Similarly, for global investors, accumulating silver around the $70 per ounce level is being advised. The current dip, therefore, is not being seen as a trend reversal but rather a healthy correction in a bullish phase, driven by fundamental supply tightness.
The dramatic session underscores the importance of the physical market's voice and presents a calibrated buying chance for alert investors, according to analyst consensus.
