Silver’s sharp correction is beginning to weigh heavily on the physical market, with refiners and bullion dealers grappling with swelling inventories as fresh investment demand remains subdued.

The precious metal has fallen more than 40% from its January peak of over Rs 4 lakh per kg, eroding investor confidence and prompting buyers to stay on the sidelines. At around Rs 2.35 lakh per kg in Mumbai’s spot market on Tuesday, silver is struggling to regain investor traction amid uncertainty over US-Iran developments and concerns over a slowdown in industrial consumption.

The steep decline has also left investors who entered at higher levels nursing significant losses, further dampening near-term buying sentiment. While physical demand remains cautious, the market continues to face pressure from expectations of softer industrial consumption.

However, the correction is not deterring everyone. Long-term investors are beginning to view lower silver prices as an opportunity to diversify portfolios, potentially providing some support to the market if investment interest gradually returns.