Silver prices experienced a significant correction, declining by 6.4% to Rs 224,429, as profit-taking activity surfaced following an extended end-of-year rally that had driven prices to unprecedented record highs. Sentiment was further influenced by a reduction in geopolitical risk perceptions, following US President Donald Trump’s comments indicating that peace talks with Ukrainian President Volodymyr Zelenskiy have made notable advancements, although a conclusive agreement may still require several weeks.
Additional pressure emerged as the CME Group increased margin requirements for white metal futures by $3,000 for the March 2026 contract, elevating margins to around $25,000. This move aims to mitigate excessive speculative activity in the wake of recent sharp rallies.
Despite the correction, silver is poised for an impressive gain of nearly 180% in 2025, supported by speculative inflows, ongoing supply disruptions following the October short squeeze, central bank purchases, robust ETF inflows, and anticipations of additional US monetary easing in 2026. Supply-side risks continue to be a concern, as Chinese silver inventories have declined to their lowest levels in ten years following unprecedented exports exceeding 660 tonnes in October. Additionally, signs of liquidity tightness are apparent in the London markets. According to data, silver holdings in London vaults experienced a month-over-month increase of 3.5%, reaching a total of 27,187 tonnes in November.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 0.76% decline in open interest, which now stands at 11,998, alongside a price drop to Rs 15,358. Support is identified at Rs 213,225; a breach of this level could lead to a test of Rs 202,025. Resistance is established at Rs 244,900, and a breakout may pave the way toward Rs 265,375.