New Delhi: Global silver prices witnessed a sharp correction of over 8 percent after hitting recent multi-year highs, triggering concerns among investors about whether the metal will fall further or rebound in the coming weeks.
The sudden decline came after a strong rally in both silver and gold, as traders rushed to book profits at elevated levels.
Market experts say the rally in precious metals had become overheated, making a correction almost inevitable. Silver, being a smaller and more volatile market compared to gold, tends to see steeper price movements during sell-offs. Once gold prices started slipping from record highs, silver followed quickly, amplifying the decline.
Another key reason behind the fall is the weakening demand outlook for industrial metals. Silver is widely used in industries such as electronics, solar panels and manufacturing. Concerns over slowing global growth and softer demand from China and Europe have weighed on the outlook for industrial commodities, adding pressure on silver prices.
At the same time, stronger economic data from the US has reduced expectations of aggressive interest rate cuts by the Federal Reserve. Higher interest rates generally make non-yielding assets like gold and silver less attractive, leading some investors to shift funds towards bonds and equities.
Despite the recent fall, analysts point out that silver prices are still significantly higher compared to levels seen earlier in the year. This suggests that the broader bullish trend has not completely broken, although short-term volatility may continue.
Looking ahead, experts believe silvers direction will depend on several factors, including inflation trends, central bank policies, global economic growth and geopolitical risks. If uncertainty rises again or interest rates begin to fall, silver could regain momentum. However, if growth concerns deepen, further downside cannot be ruled out.
For investors, financial advisors recommend avoiding panic and focusing on long-term goals. Instead of trying to time the market, gradual investments and diversification remain safer strategies. Silver can still play a role as a hedge, but its high volatility means it should form only a limited part of a balanced portfolio.