Silver prices have plunged nearly 17% from their recent record peak, with the metal losing about Rs.31,000 per kg in just ten days to trade at Rs.1.47 lakh per kg on Friday. The sharp correction comes amid improved supply in London’s bullion market — the global hub for precious metals — and profit-booking by investors after months of momentum-driven gains.

In the international market, spot silver slipped to $48.5 per troy ounce, down from $54.47 a week earlier. Market participants attributed the decline to large inflows of silver from the US and China into London, easing a shortage that had earlier propelled prices to an all-time high of Rs.1.78 lakh/kg in India on October 14.

Despite the short-term correction, analysts maintain that the long-term outlook for silver remains robust, supported by surging industrial demand from the solar energy, electric vehicle, 5G, and AI hardware sectors — all crucial components of the global green transition.

According to Vikram Dhawan, Head of Commodities at Nippon India Mutual Fund, the correction is part of a normalisation phase after an extended rally.

“Short-term traders are readjusting positions, but strategic investors — including central banks and long-term ETF participants — are likely to view this dip as a healthy consolidation,” Vikram Dhawan said.

While improved supply and investor caution have triggered a short-term fall, experts believe that structural demand and limited mining output will continue to lend support to prices over the medium to long term.