Silver prices extended their losses in international markets on Thursday, falling more than 14% this week and touching a seven-month low amid a broad sell-off in precious metals.
Spot silver price declined 0.70% to $56.99 per ounce, while Comex silver futures dropped 1.68% to $57.11 per ounce. In the previous session, silver prices had plunged 9.1% to an intraday low of $56.41 per ounce, its weakest level since November 2025.
The sharp correction has erased more than half of silver’s value from its all-time high of $121.78 per ounce recorded in January 2026. Silver prices are now down approximately 53% from that peak.
The decline in silver has mirrored weakness in gold prices. Gold rate fell below the $4,000-per-ounce mark for the first time since November 2025 and has corrected nearly 29% from its record high of $5,594.82 per ounce reached on January 29.
Why are silver prices falling?
The decline in precious metals has been driven by a stronger US dollar and growing expectations that the US Federal Reserve could resume interest rate hikes later this year.
Persistent inflationary pressures, exacerbated by the US-Iran war, have reinforced expectations of tighter monetary policy. Market participants are currently pricing in three Fed rate hikes in 2026, with CME FedWatch data indicating a roughly 67% probability of a rate increase in September.
On the domestic front, MCX silver prices have fallen nearly 20% in June and are down around 51% from their peak levels this year. MCX silver was trading near ₹2.14 lakh per kg on Thursday, compared with levels above ₹4 lakh per kg in January.
Can MCX silver prices fall below ₹2 lakh per kg?
Analysts believe the recent correction has been triggered by easing geopolitical tensions following the de-escalation of the US-Iran war, combined with dollar strength and hawkish Fed expectations.
“Comex silver prices may find short-term support around $55 per ounce and witness some short-covering. However, a decline towards $50 per ounce cannot be ruled out given the ongoing global sell-off in bullion. Silver has already entered bearish territory, although market fundamentals can change rapidly,” said Jigar Trivedi, Senior Research Analyst at IndusInd Securities.
Trivedi noted that lower prices could boost jewellery demand in India. However, he believes several factors — including Fed policy decisions, dollar strength, geopolitical developments, US mid-term elections, and jewellery demand from India and China — will determine silver’s medium-term trajectory.
He expects Comex silver to trade in a broad range of $50 – $70 per ounce during the second half of 2026.
“MCX silver may slip below the psychological ₹2,00,000-per-kg mark, but it is likely to recover quickly from those support levels,” Trivedi said.
According to Vandana Bharti, Head of Commodity Research at SMC Global Securities, the current market setup makes a break below ₹2 lakh per kg a distinct possibility.
“The market is witnessing a classic domino effect. A massive wave of long liquidation has forced over-leveraged traders to exit their positions. As prices declined, cascading margin calls triggered automated selling, intensifying the downward move,” Bharti said.
She highlighted China as the key factor behind the recent collapse in silver prices.
“Following the sharp rally in silver earlier this year, Chinese commercial banks introduced stringent risk-control measures, raising margin requirements to 140% for individual precious metals deferred contracts. These measures significantly curtailed speculative activity. As a result, China has rapidly transformed from a major buyer to a net exporter of silver, increasing supply in global markets at a time when demand is moderating,” she added.
Bharti believes MCX silver rate could test the ₹2 lakh-per-kg support level if dollar strength persists and liquidation pressure continues.
Key Support Levels to Watch
Kaveri More, Commodity Analyst – Technical Research at Choice Broking, said the sharp correction in global silver prices below $60 per ounce has increased pressure on domestic prices. However, a sustained move below ₹2 lakh per kg would require continued weakness in international markets along with a stable-to-stronger rupee.
“Technically, MCX silver price is approaching a critical support zone between ₹2,05,000 and ₹1,90,550 per kg, which is expected to attract buying interest. As long as prices remain above this range, a recovery towards the resistance zone of ₹2,30,500 – ₹2,41,200 cannot be ruled out,” More said.
However, she believes a decisive breakdown below ₹2,05,000 could intensify selling pressure and bring the ₹2 lakh-per-kg level into focus.
More advised traders to closely monitor global silver price trends, industrial demand outlook, and currency movements, as these factors will play a crucial role in determining the next direction for MCX silver prices.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
