Silver crashes nearly 27% in a day, wiping ₹1 lakh per kg; Investors left stunned

After touching historic highs, silver prices saw one of their sharpest single-day falls on MCX, triggered by global sell-off, a stronger US dollar, and profit booking.

Silver prices witnessed a dramatic collapse in a single trading session, leaving commodity markets and investors in disbelief. On the Multi Commodity Exchange (MCX), silver recorded a steep fall of nearly 27 percent, marking one of the worst one-day declines in its trading history.

Just a day earlier, silver had surged to a record high of around ₹4.05 lakh per kilogram. However, the sharp reversal erased close to ₹1 lakh per kg, dragging prices down to nearly ₹2.92 lakh per kg. The sudden correction has unsettled both retail and institutional investors.

At the start of the week, silver prices were hovering close to the ₹4 lakh per kg mark. After heavy trading activity, MCX silver prices slipped sharply towards ₹3 lakh per kg, highlighting extreme volatility. Market experts say such a sharp fall in a single day is among the most severe seen so far.

Globally, the sell-off intensified after spot silver hit its lifetime high of $121.60 per troy ounce. Soon after, prices plunged nearly 28 percent, falling to around $85 per ounce in international markets.

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The primary trigger came from the United States. US President Donald Trump’s move to nominate Kevin Warsh as the next Federal Reserve Chair eased fears over the central bank’s independence. This development strengthened the US dollar, which saw its biggest single-day jump since May last year, with the Dollar Index crossing 97.

A stronger dollar usually puts pressure on precious metals, making them costlier for non-US buyers and reducing their appeal compared to interest-bearing assets.

Silver’s fall was also influenced by a sharp correction in gold prices. After touching record highs earlier this week, international gold prices reversed sharply, with spot gold falling about 9 percent. On MCX, February gold futures declined nearly 12 percent, settling at around ₹1,50,440 per 10 grams.

Analysts note that silver often magnifies gold’s movements due to lower liquidity and higher speculative participation.

As prices fell, investors rushed to book profits, adding further pressure. According to a JM Financial Services report, silver is finding it difficult to sustain at current levels. The brokerage has advised against fresh entries and suggested existing investors brace for losses below ₹3 lakh per kg.

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However, the report also noted that if momentum returns, prices could still rise to ₹4.20-₹4.50 lakh per kg, though risks have increased significantly after such a sharp correction.

Some analysts continue to view silver as a long-term investment opportunity, citing strong industrial demand from sectors such as solar energy, electronics, and medical technology, along with its role as a hedge. Persistent supply deficits over the past five years are expected to continue until 2026.

However, experts stress that after such violent price swings, strict risk management and disciplined position sizing are essential for investors.