Silver Price Today: After Sharp Fall, Silver Recovers as Markets Stabilize—Here’s What Caused the Drop

Silver prices have shown signs of recovery after a sharp correction, but volatility remains high at the start of 2026. The precious metal, which witnessed a strong rally toward the end of December, has gone through rapid ups and downs in the first week of the new year. On January 2, silver prices rebounded in the international market, offering some relief to investors after a steep decline over the past few days.

In global markets, spot silver was trading at $72.58 per ounce on January 2, registering a daily gain of around 2.22 percent. Despite this recovery, silver is still down about 8.35 percent on a weekly basis, highlighting the sharp correction that followed its recent peak. Market experts say the rebound reflects short-term stabilization after panic selling rather than a clear reversal of trend.

Silver Prices in the Indian Market

In the domestic market, silver prices also moved higher. On the Multi Commodity Exchange (MCX), silver futures (999 purity) were trading at ₹2,40,349 per kilogram, up nearly 1.9 percent from the previous close of ₹2,35,873 per kg. However, prices remain well below the record high of ₹2,54,174 per kg recorded on December 29, meaning silver is still trading about 5.44 percent lower than its recent peak.

This gap between current prices and record highs underlines the extent of the recent correction and explains why many investors remain cautious despite today’s bounce.

Why Did Silver Prices Fall Sharply?

According to a report by Augmont Bullion dated January 1, 2026, silver had witnessed a powerful rally toward the end of December, touching $84 per ounce on December 30 in international markets. However, this surge was followed by a sudden decline of over 15 percent within just 48 hours.

The primary reason behind this sharp fall was a steep increase in margin requirements by CME Group, which triggered forced selling in silver futures. On December 26, 2025, CME raised the initial margin for March 2026 silver futures from $22,000 to $25,000 per contract. Just four days later, on December 30, margins were increased further by 30 percent to $32,500 per contract.

Impact of Higher Margins on Investors

The sudden hike in margin requirements caught many traders off guard. As New York trading opened, several investors were unable to meet the higher margin calls, leading to forced liquidation of positions. Traders who had entered the market at higher levels suffered significant losses, resulting in heavy selling pressure and a rapid price collapse.

This episode highlights how regulatory and exchange-level changes can significantly impact commodity prices, especially when markets are already overheated after a strong rally.

Silver Prices Across Major Indian Cities

Silver prices remained largely similar across major Indian cities on January 2, with minor variations due to local taxes, jeweller margins, and logistics costs. Overall, silver prices ranged between ₹2.29 lakh and ₹2.31 lakh per kilogram in most regions.

Here are the approximate silver prices in key cities:

• Chennai: ₹2,55,900 per kg

• Hyderabad: ₹2,55,900 per kg

• Mumbai: ₹2,37,900 per kg

• Delhi: ₹2,37,900 per kg

• Kolkata: ₹2,37,900 per kg

• Bengaluru: ₹2,37,900 per kg

• Pune: ₹2,37,900 per kg

• Ahmedabad: ₹2,37,900 per kg

• Kerala: ₹2,37,900 per kg

What Is the Outlook for Silver This Week?

Augmont Bullion expects consolidation in silver prices following the sharp rally and subsequent sell-off. According to the report, silver may trade in a range of $70 to $76 per ounce in the near term. In the Indian market, this translates to a potential price band of approximately ₹2,23,000 to ₹2,42,000 per kilogram.

This suggests that, in the short term, silver may see range-bound movement rather than a strong breakout, as markets digest recent volatility and adjust to higher margin requirements.

What Should Investors Do Now?

Experts caution that volatility in silver remains elevated, and short-term price swings may continue. Investors with a long-term perspective are advised to avoid making impulsive decisions based on short-term fluctuations. Instead, they should carefully assess risk, market conditions, and their investment horizon before taking fresh positions.

While silver continues to hold long-term appeal due to its industrial demand and role as a hedge, market participants are advised to stay cautious and well-informed in the current environment.

Disclaimer: Investment in commodities involves risk. Readers are advised to consult certified financial experts before making any investment decisions.