Silver Rate: Turmoil in silver—price drops from ₹4.20 lakh to ₹1.92 lakh; will it fall further?
In January 2026, silver reached an all-time high of Rs 4,20,048 per kilogram. Compared to that peak, silver has since plummeted by 54.10% in the Indian futures market. The situation in the global market is not much different; from a high of $121.64 per ounce in January 2026, prices fell to $53.47 by October 23, and currently stand at $52.76.
Global economic dynamics are the primary drivers behind this extreme volatility in silver prices. According to Ajay Kedia, MD of Kedia Commodities, silver has experienced sharp fluctuations in 2026, with tensions between the US and Iran, high crude oil prices, and concerns over inflation disrupting market trends. Expensive crude oil directly fuels fears of rising inflation, which in turn has heightened expectations that the US Federal Reserve may raise interest rates. Since gold and silver do not yield interest, investors—anticipating rate hikes—are withdrawing their capital from these precious metals and shifting it into interest-bearing, safer alternatives.
Ajay Kedia also identifies a liquidity crunch and weakness across other asset classes as significant factors contributing to the decline in silver prices. He points to the weakness in stock markets and a 37% drop in property transactions in the UAE—recorded in early March—as clear indicators of increased cash constraints and heightened caution among investors. However, Kedia notes that it would be inaccurate to attribute such a substantial decline in silver prices to any single cause.
Furthermore, recent data from China—the world’s largest importer of metals—has left silver traders in a state of uncertainty. In September, China’s imports of unrefined silver (with 99.99% purity) reached 114.93 tonnes—an increase of 73.5% compared to August. Conversely, China’s silver exports in September stood at 309.77 tonnes, marking a significant 23.7% decline from August. Looking at the period from January to September, China’s total silver exports are 8.2% lower than in the same period last year. This highlights an imbalance between supply and demand in the global market.
The persistent sluggishness in industrial demand across Europe is also exerting downward pressure on silver prices. According to data from the London Bullion Market Association (LBMA), the volume of silver held in London vaults rose by 3.22% to 28,985 tonnes by the third quarter of 2026. Furthermore, the outlook for industrial demand from Europe remains extremely weak; the Silver Institute’s 'World Silver Survey 2026' confirms that industrial demand in Europe is projected to decline by 5% throughout 2026.
Perhaps the most startling development has emerged from China’s solar energy (solar panel) sector, which has shaken the very foundations of silver demand. A recent LBMA report indicates that a major Chinese solar panel manufacturer has announced plans to replace silver with copper in its products, driven by the prohibitively high cost of silver. Since solar panel manufacturing has long been considered the primary pillar of industrial silver consumption, a shift away from silver by other solar companies could lead to a sharp drop in overall demand.
This raises the question: after such a historic decline—exceeding 54%—is investing in silver a sound decision? Ajay Kedia, MD of Kedia Commodities, firmly believes that following such a significant decline, investors should consider gradual buying (via an SIP-like approach) rather than panicking and exiting their positions in silver. He argues that a drop of over 50% is substantial in itself. Since approximately 50% of the total global demand for silver stems from industrial use, supply constraints could provide support to prices in the long term. However, it would be a mistake to assume that prices will immediately skyrocket.
Ajay Kedia identifies the $50 per ounce mark as a critical support level in the global market. He further estimates that if geopolitical tensions ease, silver could potentially return to the $90–$100 per ounce range by the next Dhanteras. He clarifies, however, that this is merely an analytical projection and not a guaranteed outcome.
Manav Modi of Motilal Oswal Financial Services believes that the movement of silver over the next 6 to 12 months could be highly uncertain and volatile. According to him, silver may trade within a confined range of $50 to $65 per ounce in the near term. Until a definitive breakout occurs—either above or below this range—the market is likely to remain in a state of indecision.
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