Silver prices have experienced a dramatic reversal, plunging nearly 54% from their January record high of ₹3.85 lakh per kg to current levels around ₹1.95 lakh per kg. According to The Financial Express, silver opened at ₹1,93,983 per kg on MCX on October 28, up ₹1,790 from Tuesday's close of ₹1,92,193 per kg. The 04 DEC 2026 contract was trading at ₹1,95,170 per kg, down ₹1,547 or 0.79%. International silver prices have corrected 55% from their all-time high of $121 hit on January 29 to below $54 per ounce. The sharp decline follows a record-setting rally driven by surging oil prices amid the Iran war and inflation concerns. Silver has crashed nearly 50% from its all-time high of ₹3,84,632 per kg in India, while international markets have seen a more pronounced 55% correction. The fall in Indian markets is smaller due to the 9% import duty hike implemented in May and rupee depreciation against the dollar, as reported by The Financial Express. Silver futures on the Multi Commodity Exchange (MCX) fell 3.5% to ₹1,92,800 per kg on October 23, 2026, down nearly 55% from a record high of around ₹4.2 lakh per kg on January 29, 2026. A year ago, on October 23, 2025, MCX silver futures were trading at about ₹1.48 lakh per kg, showing the dramatic price appreciation over the past year.
Despite the challenging price environment, lower prices have started bringing customers back to jewellery stores during the Diwali season, as reported by CNBC TV18. However, fears of further price drops and broader economic pressures are keeping consumers away from silver coins and bars, though jewellery continues to hold up. Shaya, Titan Co.'s dedicated silver jewellery brand operated by CaratLane, has recorded festive sales growth of 25-30% year-on-year, below its expectation of 80-100%, as reported by The Economic Times. "One major reason is the total sales eradication in the coins category," said an executive familiar with the matter, adding that coins accounted for about 30% of Shaya's sales during the previous festive season. Shaya has stepped up discounts to draw consumers back, offering a flat 40% off across its products and an additional 10% off when customers buy two items, according to The Economic Times. The brand is also expanding its range of lower-priced products (under ₹2,000) as it adapts to higher silver prices, with its portfolio growing from around 1,500 stock-keeping units (SKUs) to 2,400, focusing on affordable, minimalist designs. Rahul Mehta, managing director of Silver Emporium, said elevated prices were weighing on investment-led purchases, with demand shifting towards personal consumption and jewellery.
The government has issued permits on October 22 for about 6,500 tonnes of silver imports over the next six months, equivalent to nearly 93% of the more than 7,000 tonnes imported in 2025, as reported by The Economic Times. The approvals ease restrictions introduced in May, when the government required prior authorization for silver imports, and tightened in June to cover silver grain and powder. The government had also raised import duties on gold and silver from 6% to 15%, effective May 13, 2026, to curb precious-metal imports and ease pressure on foreign-exchange reserves. The additional supply is expected to ease domestic shortages and premiums, even as demand remains weak. India's 15% silver import duty hike has curbed physical imports, while weaker investment demand has hurt prices, with Indian silver ETF net inflows falling 79% between January and September, according to Saish Sawant from Emkay Global Financial Services.
Market experts remain divided on silver's near-term prospects, with SEBI-registered research analyst Anuj Gupta advising investors not to rush into buying silver at this time, believing prices may fall further. As per ET Now, experts say silver could reach levels of ₹1.70 lakh to ₹1.80 lakh per kilogram due to concerns about silver demand. Ajay Kedia from Kedia Commodities suggests buying small amounts in instalments rather than investing the entire amount at once, considering $50 per ounce in the international market to be a strong level. James Steel, Chief Precious Metals Analyst at HSBC Securities, expects the market to enter a period of consolidation with slight upward trajectory, looking for moderate gains in 2027. However, Steel notes that USD strength and high yields are negative for silver, along with weaker industrial and jewelry demand and increased supply. If tensions ease, silver could reach $90 to $100 per ounce by next Dhanteras, though volatility may persist until then. According to Deveya Gaglani from Axis Securities, silver's long-term case remains intact, though a correction of more than 50% from its peak raises questions about the strength of the bull market.
Weak demand for solar panels and AI chips could put pressure on silver prices, according to Anuj Gupta's analysis reported by ET Now. Silver is not only used for jewellery and investment purposes, but is also essential for sectors such as solar panels and electronic chips. The structural fundamentals remain supportive, with nearly 50% of demand linked to industrial applications and persistent supply deficits. Ajay Kedia notes that supply shortages in the market could provide support to prices in the future, despite current weakness. This contrasts with Anmol Silver CEO Kishore Roonwal's earlier assessment that lower silver imports would not significantly impact prices, as recent government measures to ease import licences should improve supply. The broader silver market outlook remains influenced by the balance between industrial demand, mine production and structural supply constraints, with the Fed's commentary on inflation and borrowing costs being key determinants of whether silver's recovery can turn into sustained upward momentum. Manav Modi from Motilal Oswal notes that high prices could encourage manufacturers to use less silver or substitute it with other materials, particularly in solar panels, while jewellery and silverware demand have also softened.
