Silver’s spectacular rally has given way to an equally dramatic correction, leaving investors wondering whether the bull run has merely paused or have prices already peaked. In fact in less than six months, international silver prices have crashed more than 50% since the peak seen in late January.COMEX Silver has declined 37% since the US-Iran war and is down 52% from its all-time high. In domestic markets. 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 prices stands in sharp contrast to that of gold. Interestingly, natural diamond prices are seeing a revival after three years. Reports suggest that solitaire prices are up 5-8%.Silver and gold prices rallied strongly in 2025, when the stock market was mostly volatile. But the crash in the precious metals comes at a time when the domestic stock markets are also down due to US-Iran conflict uncertainties, though Sensex has recovered recently due to dropping crude oil prices. Where does the current geopolitical and economic situation leave silver and gold prices? Is the worst over for silver prices or will prices correct further? What factors will drive silver prices in the coming months and what strategy should investors adopt? Let’s take a look:
Why has silver crashed – and why more than gold?
Silver had rallied nearly 350% from around Rs 95,000 to Rs 4,00,000 between 2025 and early 2026, making it one of the strongest-performing commodities. Experts feel that such an exceptional rally naturally invited aggressive profit booking!
Silver prices rose sharply in 2025, but have dropped since then
Pranav Mer, Sr. Vice President, EBG – Commodity & Currency Research, JM Financial Services explains that silver’s parabolic rally ended towards the end of January 2026. The sharp correction was triggered by profit-booking/ liquidation due to margin hikes to curtail speculative activity. However, it again attempted a recovery and moved close to in the beginning of March 2026, but the attempt failed and prices reversed.1. The price correction was initially triggered by a corrective move in industrial metals, and demand destruction from the industrial side after prices spiked nearly 4-times in a span of 3-months and industries looked for alternatives.2. 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). There was an inverse correlation because the US was directly involved in the war.3. At the same time a corrective move was seen in the industrial metals as well. Silver accounts to nearly 50% in industrial usage + its precious metals appeal – it follows cues from industrial metals as well, especially copper.Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities explains that 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 tells TOI.Commodity expert Maneesh Sharma blames 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 tells TOI.“Silver has fallen more sharply than gold because of its dual usage as an industrial metal & an investment asset as almost 60 % of demand comes from industrial uses. This is different from gold, which is purely a safe-haven investment asset. Silver’s decline has been accelerated by softening global manufacturing demand following US Iran tensions due to concerns of rising oil-led inflation,” he adds.Jateen Trivedi of LKP Securities believes that margin hikes, followed by geopolitical uncertainty and changing interest rate expectations, acted as the catalysts for a much deeper correction than gold.
Gold prices rallied strongly till January 2026. Since then, they have fallen, but the dip is not as sharp as silver.
Additionally, gold is largely supported by accumulation from central banks around the world, which has prevented the yellow metal prices from seeing a correction as large as silver.
Silver: Is the bull run over & what should investors do?
Experts are divided on whether the strong bull run in silver prices is over. Some see further correction in prices, while others say the demand fundamentals remain intact.Maneesh Sharma says that although prices have declined by over $15 from above $70 to a low of $55.69 in the second half of the June month, a bounce back up to 61–63 $/Oz (CMP $58.80/Oz) cannot be ruled out in a short term perspective.This could translate to levels of Rs 2,32,500 – 2,34,000/kg. (CMP Rs. 2,26,300/kg.) on the higher side in MCX September futures contract.“However, prices still have room to witness more downside during July month as inflation-led worries, hawkish repricing of interest rates could still influence weakness in prices in the coming month. Meanwhile, silver exhibits a strong historical bullish seasonality in August, often acting as one of the best months for the precious metal. Hence any decline in prices to below Rs 2,00,000/Kg levels in domestic markets in July month could remain a long-term opportunity to accumulate the metal from an investment perspective,” he tells TOI.Divya Mandaliya, Commodity Research Analyst at Anand Rathi Share and Stock Brokers Limited is of the view that the current correction in silver does not signal the end of the bull market, but rather a natural pause after a strong and fast rally. “In markets like silver, sharp up-moves are often followed by equally sharp corrections of 30–40%, as prices cool down and return to more balanced levels. The recent fall reflects this normal cycle, where the earlier momentum-driven rise has now given way to profit booking and price consolidation,” she tells TOI.“Importantly, this move is largely flow and positioning driven rather than a change in fundamentals. There has been no major shift in the long-term demand outlook or supply structure that would suggest the bull cycle is over. Instead, the correction reflects profit booking and unwinding of leveraged positions after an extended rally. In simple terms, the market is catching its breath after running too fast, rather than changing direction,” she adds.
Why silver has fallen
Jateen Trivedi too feels that the long-term bull run in the white metal is intact. “While the near-term momentum has weakened, the long-term structural bull case for silver remains intact, supported by industrial demand from sectors such as solar energy, EVs, and electronics,” he says.“The current correction has brought silver back into an attractive accumulation zone. In MCX, the Rs 1,80,000– Rs 2,20,000 range appears favourable for long-term investors, while internationally the $50–55 zone offers a reasonable accumulation opportunity for those with a medium- to long-term investment horizon,” he adds.The Anand Rathi expert says silver is looking more attractive again after the correction because the earlier strong rally has now fully cooled down.From a peak of around $97.5 per ounce, silver has fallen to 58.81, and this move has removed a lot of the excess buying and over-optimism that had built up during the rally phase. She sees the market as more balanced now.“At this stage, the next meaningful move in silver will mainly depend on US interest rate direction and Fed policy signals, movement in the US dollar and real yields, and the recovery in global industrial demand and overall risk sentiment, which together will decide whether the market stays in consolidation or starts building a fresh upward trend again. For now, it remains a “wait and watch” condition, while medium- to long-term silver fundamentals remain supportive,” she adds.On the other hand, Pranav Mer of JM Financial Services expects further downside in silver prices.“Silver prices still have more room to correct and we expect it to drop below $50 in coming months. We are not advising fresh buying at these levels for a longer-term. However, if anyone is looking to accumulate a monthly SIP, they can start any time, as corrections would bring the average cost down,” he says.
Where are silver prices headed?
Going forward, the US interest rate cycle and the direction of the US dollar will likely influence silver prices, acting as the biggest drivers in either direction. Industrial demand and geopolitical developments will continue to influence sentiment. A prolonged high-rate environment is likely to keep prices under pressure.On the flip side, a weakening US dollar and possibility of fewer or no rate hikes would work well for silver prices.“In this environment, silver is likely to remain in a range-bound but volatility-supported phase, where downside is relatively cushioned after the recent correction, while upside moves will depend on easing real yields or sustained dollar softness, keeping the medium-term bias constructively supportive rather than directional,” concludes Divya Mandaliya.(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
