Silver Crash: Silver prices drop by ₹1,28,000 in a single day

Gold and Silver Crash: For the first time in history, silver prices crossed ₹3 lakh on January 19. However, within 10 days, the biggest ever fall in silver prices was recorded.

Jaipur: After reaching the seventh heaven, the prices of silver have now plummeted. For the first time in history, silver prices crossed ₹3 lakh on January 19. Following this, a continuous upward trend persisted, and by January 29, silver reached its all-time high of ₹4.20 lakh per kg. However, the very next day after setting a record, a major upheaval occurred in the gold-silver market. In a single day, silver prices dropped by ₹1.28 lakh per kg, causing a stir among investors and traders.

On the Indian futures market MCX, silver fell by ₹1,28,000 from its all-time high of ₹4.20 lakh per kg to ₹2.91 lakh in a single day. Due to profit-taking, its prices decreased by 27 per cent, or over ₹1.08 lakh, intraday on Friday. Gold also fell by ₹33,000 from its record high of ₹1.80 lakh to ₹1.49 lakh per 10 grams.

In this context, the big question is how the silver, which had reached the moon, came down to earth in just 10 days? What was the reason for such a sharp decline in silver prices in a single day?

Know What Experts Say

The gold and silver trade in the bullion market was completely influenced by speculation. Due to abnormal fluctuations in prices, the situation had become so unstable that even jewellers were hesitant to conduct business, which significantly impacted trade. However, with the decrease in silver prices, there is hope that trade will return to normalcy.
-Saras Sharma, Bullion Trader, Jaipur

US President Donald Trump has nominated Kevin Warsh as the next Chairman of the Federal Reserve, replacing Jerome Powell. Consequently, the US dollar strengthened, and gold and silver prices fell. However, the fluctuations in silver prices have affected the business of jewellers. The Union Budget is to be presented on February 1. It is believed that efforts will be made to provide some relief to traders. The day after the budget, silver prices may see another surge. It is speculated that prices will rise again after the budget.
-Hanuman Lal Soni, Jeweller, Jalore

The bullion trade has suffered a major blow due to the international speculative market. Fluctuations in gold and silver prices should be within a defined limit, but the speculative market has caused significant losses to jewellers. The fall in silver prices has caused losses not only to traders but also to people who invested in the speculative market. It appears that some individuals are trying to sideline small traders to establish dominance in the bullion business.
-Ramaraj Goyal, Bullion Trader, Jaipur

The Great Supply Crisis

The biggest reason for this surge in silver prices is the gap between supply and demand, which currently seems impossible to fill. According to one report, the world is facing a structural deficit in silver for the fifth consecutive year. To put it simply, the demand for silver is 300 million ounces more than what is being extracted from the mines.

Countries Dominating the World's Silver Reserves

Peru: 93,000 tonnes
Australia: 88,000 tonnes
Russia: 72,000 tonnes
China: 41,000 tonnes
Mexico: 37,000 tonnes