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Silver Selloff: Silver prices have dropped sharply by around 18% from recent highs as investors book profits after a strong rally.
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Technical Support: Experts see ₹1,38,000–₹1,40,000 as an important support zone for a short-term rebound.
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Long-Term Bullish View: Despite the correction, the long-term outlook for silver remains positive according to analysts.
Silver Selloff: A Sudden Drop After a Strong Rally
The Silver Selloff in the Indian market has caught investors’ attention, with prices falling sharply from recent highs. After touching around ₹1,77,794 per kilogram in the spot market at Ahmedabad, silver prices have dropped nearly 18%, now trading near ₹1,45,967 per kilogram. According to market analysts, this decline was not unexpected. Silver had witnessed a strong rally earlier this year, climbing from around ₹1,10,000 to ₹1,70,000 per kilogram. Experts say such a fast-paced rise usually creates an overheated market, leading to a temporary correction.
Apurva Sheth, Head of Market Perspectives & Research at SAMCO Securities, explained that silver had entered an “overheated zone” where prices rise too fast due to excessive optimism among retail traders. This kind of market enthusiasm, he noted, is often a warning sign of a Silver Price Correction in the near term.
Silver Selloff: Technical Chart Signals a Reversal
Technical indicators are now confirming the Silver Selloff. Sheth pointed out that the chart of Silver futures on the Multi Commodity Exchange (MCX) shows a clear “Head and Shoulders” pattern — a well-known chart formation that usually signals the end of an uptrend. This pattern forms when prices rise to a peak (the head) after two smaller peaks (the shoulders), and then fall below the neckline support level. Once this neckline breaks, it suggests that buyers are losing control and sellers are taking over.
At present, silver prices have already dropped below this neckline, confirming the pattern. Sheth mentioned that the current levels around ₹1,40,000 align closely with the 50% Fibonacci retracement of the previous rally — a common technical level where prices tend to pause or bounce temporarily.
Silver Price Correction: Key Levels to Watch
The ongoing Silver Price Correction has brought the metal close to its short-term support zone. Sheth highlighted that the price range between ₹1,38,000 and ₹1,40,000 per kilogram is a crucial support area. In this range, traders may see a technical bounce as some buyers step in.
However, Sheth also cautioned that if silver prices fall below this zone decisively, the metal could slide further. The next key level lies near ₹1,33,000 per kilogram, which corresponds to the 61.8% Fibonacci retracement level — a deeper but still healthy pullback level during an overall bullish trend. This means that while the short-term weakness might continue, the fall could also create an attractive buying opportunity for long-term investors.
Silver Selloff: Not a Reason to Panic
While the Silver Selloff has made many investors nervous, analysts like Sheth believe that this phase should be viewed as a natural and healthy correction within a larger bull market. Markets often experience profit-booking after long rallies, and such corrections help remove excessive speculation or “froth” from prices.
Sheth explained that this phase is part of a typical market cycle where early traders take profits, and new buyers wait for better entry points. Once the correction stabilizes and market sentiment cools down, silver could again move upward, continuing its long-term trend.
Silver Price Correction: Global and Domestic Factors at Play
The Silver Price Correction in India is also being influenced by global trends. Silver prices are closely linked to the movement of the U.S. dollar, bond yields, and gold prices. When the dollar strengthens or interest rates rise, investors often move money out of precious metals, putting pressure on silver prices. On the domestic front, higher import costs and shifting demand from industrial sectors can also impact prices in the short run.
Despite these pressures, analysts maintain that silver’s long-term fundamentals remain strong. Demand from solar panel manufacturing, electric vehicles, and electronics continues to support its industrial usage. Moreover, silver remains an important store of value for investors seeking protection against inflation.
Silver Selloff: What Investors Should Do Now
For investors watching the Silver Selloff, experts suggest exercising patience rather than panic. Short-term traders should be careful near the ₹1,38,000–₹1,40,000 zone, as prices might remain volatile. Long-term investors, however, can look for opportunities to gradually accumulate silver if prices approach ₹1,33,000 or lower, provided the broader economic outlook remains stable.
Apurva Sheth concluded that while short-term caution has proven right, his long-term bullish view on silver remains unchanged. Once the ongoing correction settles, he expects silver to resume its upward journey in the months ahead.
Silver Price Correction: Final Outlook
To sum up, the Silver Selloff may continue for a while, but analysts see it as a temporary pause within a larger bullish story. Technical patterns suggest that the downside could be limited to ₹1,33,000 per kilogram before buyers return in strength. The recent fall is helping cool off excessive enthusiasm, setting a cleaner base for the next big rally.
For investors, this is a time to stay alert, avoid panic selling, and keep an eye on support zones. As history has shown, every Silver Price Correction eventually leads to a fresh phase of opportunity for those who remain patient.
