Silver halves from peak before Dhanteras

Silver prices have undergone a steep correction ahead of Dhanteras, falling more than 50% from record highs set earlier in 2026. On the Multi Commodity Exchange (MCX), silver futures for December 4 delivery were trading at ₹1.96 lakh per kg on October 26, up 0.39% on the day but still far below their previous peak. The contract had touched ₹1.94 lakh per kg on October 23 and slipped below ₹2 lakh per kg after an extended decline from much higher levels.

Internationally, silver has also seen a sharp reversal. Prices dropped to just above $54 on October 23. Silver recently closed at $53.83, marking its weakest finish of 2026 and putting it about 56% below a record high of $121.74.

The pullback in silver reflects a combination of profit-booking after the early-2026 surge and shifting expectations around US interest rates. Movements in the dollar and bond yields have added pressure, contributing to a reassessment of precious metals in portfolios. The price action has also been influenced by concerns over industrial demand, which plays a key role in silver’s outlook.

Silver’s extensive use in sectors such as solar energy and electronics links its performance to global manufacturing and economic activity. Uncertainty in these areas has weighed on sentiment, even as structurally supportive themes like electrification remain in focus over the longer term. Traders are increasingly buying protection against further declines, with a rise in put-call skew indicating expectations of additional downside risk.

Analysts caution that the steep fall does not necessarily signal a durable bottom for silver prices. In the near term, silver is expected to remain volatile, and investors are advised to avoid aggressive buying until there are clearer signs of price stabilisation. For the medium term, the path of the dollar, US monetary policy, bond yields and global manufacturing activity is highlighted as critical for any sustained recovery.

Over the long term, silver could benefit from structural demand tied to electrification, solar installations and electronic components, but risks from technological change, substitution and slower growth are also noted. Against this backdrop, gradual accumulation rather than attempts to time an exact bottom is suggested as a more measured approach for investors with sufficient risk tolerance and longer horizons.

The correction comes just before Dhanteras and Diwali, when purchases of precious metals typically rise. From September 30 to October 23, the domestic price of silver in one benchmark series fell from ₹2,20,435 per kg to ₹1,94,415 per kg, a decline of ₹26,020 per kg over 24 days. During the same period, silver prices on MCX and in the spot market dropped below ₹2 lakh per kg, offering lower entry levels than earlier in the year.

Silver exchange-traded funds (ETFs) have attracted significant interest amid the price slide. These products recorded net inflows of ₹1,974.32 crore in September, up about 55% from ₹1,270.63 crore in August. However, higher inflows are not presented as assurance of a near-term price rebound, and investors are encouraged to assess their allocation, time horizon and ability to absorb further losses, especially when using Dhanteras-related savings for silver-linked investments.