Silver sees wild swings: Prices fall 7% on COMEX and MCX after record peak as volatility rattles investor

Silver prices dropped sharply again on Wednesday, as sellers reclaimed control after a dramatic rebound in the previous session.  On COMEX, silver opened sharply lower and slid to an intraday low of $71.97 per ounce, marking a single-session drop of more than 7%.

The fall followed a brief recovery on Tuesday and came after silver had touched fresh lifetime highs earlier in the week. In the domestic market, MCX silver mirrored the global sell-off, tumbling nearly Rs 22,000 from Monday’s record peak of Rs 2,54,174 per kg to an intraday low of Rs 2,32,228, a fall of around 6% during early trade.

Monday’s collapse had already rattled investors. According to a Reuters report, silver posted its steepest one-day fall in five years during that session, wiping out a large chunk of recent gains. Yet, despite the violent pullback, the metal remains up about 155% on a year-to-date basis, highlighting the scale of the rally that preceded the correction.

Interestingly, Tuesday saw aggressive bargain hunting. MCX silver surged nearly Rs 27,000 in a single session, its largest intraday rise on record, recovering most of Monday’s losses and closing just Rs 3,000 below its all-time high. That rebound, however, proved short-lived as fresh selling emerged again on Wednesday.

Market experts attribute the turbulence to a combination of technical and macro factors rather than a breakdown in fundamentals. Ponmudi R, CEO of Enrich Money, said the correction was largely driven by margin hikes on the CME, forced deleveraging by leveraged traders, year-end tax-related selling and thin liquidity conditions. “These factors have kept near-term sentiment cautious, even though the broader trend remains intact,” he said.

Globally, silver is now hovering around the $72–$72.30 per ounce range, sharply lower from recent highs of $82–$84. Still, analysts argue that such sharp pullbacks are common in strong bull markets. Ponmudi noted that these corrections often act as a “healthy reset,” flushing out excess leverage without altering the long-term direction, provided key support levels hold.

Structural factors continue to lend support to prices. Jigar Trivedi, Senior Research Analyst at Reliance Securities, pointed to persistent supply constraints and robust industrial demand, especially from solar energy, electronics and data centre infrastructure. “These themes are not short-term in nature and continue to underpin silver’s longer-term outlook,” he said.

Experts also stress that today’s silver market operates in a very different environment compared with the past. Ponmudi recalled that between 2015 and 2020, domestic silver prices hovered near ₹33,000 per kg. “The current market is far deeper and more globally integrated, with ETFs, derivatives and algorithmic trading playing a major role, which naturally leads to sharper day-to-day price swings,” he said.

From a technical perspective, analysts have identified crucial levels to watch. Rahul Kalantri, VP Commodities at Mehta Equities, said silver has support in the $74–$72.75 zone, with resistance near $75.95–$76.80. In rupee terms, key support lies around Rs 2,45,150–Rs 2,42,780, while resistance is seen near Rs 2,54,810–Rs 2,56,970.

Looking ahead, brokerages remain cautiously optimistic. Motilal Oswal Financial Services continues to recommend a buy-on-dips strategy, citing physical supply tightness and constrained inventories. The brokerage has reiterated a COMEX target of $77, equivalent to about Rs 2,46,000 domestically, noting that silver’s rally is increasingly being driven by real metal scarcity rather than speculative excess.