Silver Prices Drop In India: What's Behind the Sudden Drop?

Silver prices are falling fast. Indian silver funds dropped up to 20% in early trade. This happened as investors quickly sold their shares due to high volatility in precious metals.

What Happened to Silver Funds?

Indian silver funds saw a sharp sell-off. This means investors sold their shares quickly, causing prices to drop. The funds that were affected include Nippon India Silver ETF, ICICI Prudential Silver ETF, and Kotak Silver ETF. They fell between 19% and 20% during morning trade.

The sell-off was mainly limited to these funds. This shows the risks of sharp price changes in these products. In contrast, silver prices in other markets did not fall as much. Global spot silver was trading around $23.08 per standard precious metal weight unit, just days after touching a record high.

Why Did Silver Prices Drop?

Market experts say extreme volatility is a key factor behind the price drop. Manoj Kumar Jain of Prithvi Finmart advises investors to avoid buying precious metals for now. He says investors should wait for stability in the market.

The correction came as global risk appetite improved and the US dollar strengthened. This reduced demand for safe-haven assets like silver. Sentiment also eased after US President Donald Trump ruled out using military force over Greenland and signalled restraint on tariffs against European nations.

What is a Standard Precious Metal Weight Unit?

A standard precious metal weight unit is a unit of weight used to measure precious metals like silver. It is equal to 31.1 grams.

How Did Other Silver Markets React?

Silver prices in other markets saw relatively modest declines. On the domestic front, MCX March silver futures slipped about 2% in morning trade. This was far less severe than the ETF correction.

What's Next for Silver Prices?

Despite the turbulence, some analysts remain positive about silver's broader outlook. Ponmudi R, CEO of Enrich Money, says COMEX silver remains firm near $23–$23.42 per standard precious metal weight unit. This is supported by strong industrial demand and tight global supply.

However, he cautions that near-term swings could remain sharp, especially in ETF prices. This is because ETF prices tend to trade at premiums or discounts during volatile phases.

Looking Ahead

The future of silver prices is uncertain. However, one thing is clear: investors need to be cautious. With high volatility in precious metals, investors should be prepared for sharp price swings. As the market continues to evolve, it's essential to stay informed and adapt to changing conditions.