Silver's spectacular rally, which saw prices surge nearly 350% from around Rs 95,000 to Rs 4,00,000 between 2025 and early 2026, has given way to an equally dramatic correction. According to the Business Today report, international silver prices have crashed more than 50% since the peak seen in late January 2026. In less than six months, COMEX Silver has declined 37% since the US-Iran war and is down 52% from its all-time high. On the domestic front, MCX Silver has corrected 20% since the war and 46% from its all-time high. In comparison, COMEX Gold has fallen 15% since the war and 27% from its all-time high, while MCX Gold is down 12% since the war and 22% from its peak. The deeper correction in silver stands in sharp contrast to gold.
Why Silver Crashed More Than Gold
Pranav Mer, Sr. Vice President, EBG - Commodity & Currency Research at JM Financial Services, explained that silver's parabolic rally ended towards the end of January 2026. The sharp correction was triggered by profit-booking and liquidation due to margin hikes to curtail speculative activity. A subsequent recovery attempt in early March 2026 failed and prices reversed.
According to Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, the initial decline before the war was largely profit booking after an extraordinary rally. "However, the post-war correction has been driven by a combination of higher interest rate expectations, a stronger US dollar, weaker investor participation, and liquidation across commodities," he told TOI.
Commodity expert Maneesh Sharma blamed speculative capital in silver investments for its sudden rise and equally sudden crash. "Silver's massive rally before the conflict had seen a high volume of fast-moving speculative capital especially from fund houses in China & US entering into the commodity. As geopolitical tensions have escalated since February end, this retail money has quickly exited, amplifying the price drop compared to gold," he told TOI.
The report also highlights that silver's correction was initially triggered by a corrective move in industrial metals and demand destruction from the industrial side after prices spiked nearly four times in three months, prompting industries to look for alternatives. The beginning of the US-Iran war triggered fresh safe-haven demand for the US dollar and Treasuries, while gold moved in the inverse direction because the US was directly involved. Additionally, a corrective move in industrial metals, especially copper, affected silver given its nearly 50% industrial usage.
Price Comparison: Silver vs Gold
| Metal | Exchange | Decline Since US-Iran War | Decline From All-Time High |
|---|---|---|---|
| Silver | COMEX | 37% | 52% |
| Silver | MCX | 20% | 46% |
| Gold | COMEX | 15% | 27% |
| Gold | MCX | 12% | 22% |
Supply and Demand Dynamics
Silver's dual role as an industrial metal and an investment asset amplifies its price swings. The report notes that on-ground physical demand in India remains good due to the wedding season and Akshaya Tritiya, along with festival demand. However, industrial demand, particularly from the solar sector and electronics, may get impacted if a recession hits global economies. The report also mentions that tariff policies are adding pressure: Trump slapped a 25% tariff on gold, silver, and platinum imports by the US, and India is considering tariffs on gold, silver, and platinum imports. This has led to increased smuggling.
Geopolitical and Economic Factors
The crash occurs amid stock market declines due to US-Iran conflict uncertainties, though the Sensex has recovered recently due to dropping crude oil prices. The report indicates that the US-China tariff war has re-escalated, global equities are correcting, and expectations of Fed rate cuts are now less certain. These factors combined have weighed on silver prices. Additionally, the report notes that rupee depreciation has helped limit the fall in domestic silver prices, but the broader trend remains bearish.
Outlook for Silver
Looking ahead, silver prices may find support from industrial demand revival if recession fears ease, continued Indian wedding and festival demand, and potential rate cuts by the Fed. ETF flows will also be a key monitor. However, if geopolitical tensions persist and tariffs escalate, silver could correct further. The report does not provide a specific price target but advises investors to watch for a base near Rs 3,00,000 on MCX before considering fresh positions. For traders and procurement teams, the high volatility demands careful risk management, with silver's correlation to both industrial metals and gold making it a complex hedging instrument.
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