Silver holds steady amid volatility, profit-booking pressure


Daijiworld Media Network - New Delhi

New Delhi, Oct 20: Silver prices remained steady on Monday, gaining a marginal 0.1% to trade at Rs 1,56,755 per kilogram, hovering around 8% below its recent peak. The subdued movement follows a week of sharp volatility and growing investor caution.

On its last trading session at the Multi Commodity Exchange (MCX) on October 17, silver futures saw a significant drop of nearly 10% from session highs, plunging from Rs 1,70,415 to an intraday low of Rs 1,53,700, before recovering to close at ?1,57,300, marking a modest 0.44% daily gain.

Globally, silver also saw a pullback, sliding 6% from nearly $54 per ounce — a recent high — to around $51.50.

Key Factors Behind the Movement

• Profit-Booking: Analysts suggest the recent dip is largely due to investors locking in profits, especially after a robust rally over the past few months.

• Easing Safe-Haven Demand: A reduction in geopolitical tension, particularly the softening of US-China trade disputes, has lessened safe-haven buying. Notably, US President Donald Trump’s remarks calling additional tariffs “unsustainable” have calmed investor nerves.

• Stronger Fundamentals: According to Motilal Oswal, the current silver rally is not purely speculative, unlike earlier cycles in 1980 and 2011. The brokerage said the metal’s price movement—1.7 times more volatile than gold—indicates a structural revaluation.

“This rally has firmer foundations, backed by real industrial demand and global macro shifts,” Motilal Oswal noted.

• Industrial Demand Driving Prices: Silver’s increasing use in solar panels, electronics, and electric mobility has provided long-term support for prices. Between November 2022 and October 2025, silver surged from $24 to nearly $47 per ounce, largely due to these sectors.

Mixed Outlook Ahead

While some analysts predict further profit-booking and downward pressure, others remain bullish due to silver’s dual role as both an investment metal and an industrial commodity.

MP Financial Advisory Services recently forecasted that silver could sustain levels above $50, citing robust industrial demand.

“Thanks to industrial demand, silver has the required merits to cross over the $50 mark this time,” their report stated.

At the same time, rising bond yields and a more stable banking environment may continue to pressure non-yielding assets like silver and gold.

Conclusion

While silver remains under near-term pressure from profit-taking and easing safe-haven flows, its strong industrial base continues to provide longer-term support. Traders are advised to watch for further global economic developments, especially in manufacturing and energy, which could influence the next leg of silver’s price movement.

  

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