Silver prices came under heavy pressure on Thursday, plunging Rs 10,000 during the intraday session. After closing at Rs 2,50,605 per kg on Wednesday, March 2026, silver futures on the MCX dropped sharply to an intraday low of Rs 2,40,605.
Silver Prices Crash by Rs 10,000 in One Day: Is the White Metal’s Rally in Danger?
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By noon, the contracts were trading at Rs 2,43,911, down Rs 6,694 or 2.67% from the previous close, highlighting growing volatility in the precious metals segment.
Adding to the selling pressure in silver was the annual rebalancing of major commodity indexes, including the Bloomberg Commodity Index. This routine adjustment, which realigns fund allocations based on last year’s price performance, has turned into a significant market-moving event due to the sharp run-up in precious metals in 2025.
Passive funds tracking these indexes have begun selling silver contracts from Thursday to match the new weightings, with gold seeing a comparable scale of outflows.
The steep correction follows a record-setting rally in December 2025, when silver hit an all-time high of USD 83.60/oz, driven by tight supply conditions.
However, according to HSBC’s latest report, silver’s recent momentum may be losing steam, with the bank cautioning that prices have reached “unsustainable levels amid high volatility.”
While gold continues to provide critical support as a safe haven, HSBC notes that silver’s fundamentals—particularly industrial and jewelry demand—are showing signs of strain.
Silver outlook for 2026: Volatility ahead as supply rises, demand cools
HSBC’s 2026 outlook underscores several challenges that could temper silver’s long-term trajectory.
The bank has raised its average price forecast for 2026 to USD 68.25/oz, up from its earlier projection of USD 44.50/oz, but expects a notable pullback to USD 57.00/oz in 2027. By 2029, prices are expected to moderate further to USD 47.00/oz.
Despite near-term support from a soft US dollar and institutional buying, HSBC highlights that industrial demand is weakening, while jewelry purchases remain subdued due to elevated prices.
On the supply side, the report points to a steady increase in mine output, supported by byproduct recovery and rising recycling levels. Although silver faced a deficit of 230 million ounces in 2025, HSBC projects this will shrink to 140 million ounces in 2026 and further to 59 million ounces by 2027.
These moderate deficits, coupled with rising above-ground inventories, may cap long-term price gains.
Overall, HSBC suggests that while prices may remain volatile in the near term—buoyed by institutional flows and coin/bar demand—long-term sustainability is questionable given structural shifts in demand and supply dynamics.
Disclaimer
This article is intended for educational purposes only. The views and opinions expressed are those of individual analysts or brokerage firms and do not represent the views of GoldSilverReports.com. Investors are strongly advised to consult certified financial experts before making any investment or trading decisions.
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