Heavy fall in silver prices: Prices fall to ₹14000, panic among investors
Know the main points and gist of the news at a glance
New Delhi There was such a shock in the silver market on Thursday that investors were left breathless. There was a huge fall in the price of silver by about ₹ 14000 in a day in the futures market, due to which both traders and investors are in panic.
On the Multi Commodity Exchange (MCX), silver for March delivery fell by Rs 3,264 or 4.02% to the day's low of ₹ 2,63,970 per kg (silver price today). Till the time of writing the news, the price was trading at ₹ 2,67,179 per kg (silver rate today).
Its high during the day was ₹ 2,76,000 and low was ₹ 2,63,970. Whereas on the previous trading day silver had closed at ₹ 2,78,364. That means till now a decline of about ₹ 14394 is clearly visible as compared to closing.
Global market also crashed
However, the picture of the global market is slightly different. Silver on COMEX fell by 4.49% to $ 86.90 an ounce. Earlier, after falling to $64.10 in early February, silver had jumped 27% to reach $91. The fear of increasing tariffs in America and the weak dollar were considered to be the major reasons behind this rise.
But the real story is of supply crisis. According to Ajay Kedia, director of Kedia Advisory, the deliverable silver stock in COMEX has declined to 88.2 million ounces, which is 75% less than in 2020. 'Paper' deals in the market have become 5 times more than physical silver, due to which the fear of squeeze has increased.
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Prices falling due to China's control
According to Ajay Kedia,
China has tightened control over about 60% of the global refined supply by implementing a new export license policy. Silver in Shanghai is trading at a $10 premium to London, drawing the physical metal to Asia.
The global shortage of 67 million ounces for the sixth consecutive year is also putting pressure on the market. On one hand, jewelery demand in India is weak due to high prices, on the other hand, investment of $2.44 billion has come in ETFs in a week.
Overall, there has been a sharp decline in silver in the domestic market, but the global supply crisis and investment demand are putting it at a very sensitive juncture. Now the question is, is this decline a buying opportunity or the beginning of a bigger upheaval?
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