Silver prices experienced a significant correction, closing down by 9% at Rs 2,65,652, as aggressive profit-taking was triggered by a robust rebound in the U.S. dollar following President Donald Trump’s nomination of former Fed governor Kevin Warsh as the next U.S. Federal Reserve Chair. The recent action, alongside robust U.S. producer price figures, has diminished anticipations for imminent monetary easing, significantly impacting the precious metals sector.
The decline came after an extraordinary rally last week, during which silver reached a record high of Rs 4,20,000, propelled by fiscal concerns, robust central-bank purchases, and ongoing ETF inflows. Notwithstanding the pronounced correction, the underlying fundamentals continue to provide support. Market sentiment remains influenced by apprehensions regarding China’s newly implemented export licensing regime, which has granted export permissions to only 44 companies for silver in the 2025–26 period. While there are currently no explicit restrictions, China exported approximately 5,100 tonnes last year, marking the highest level since 2008.
Chinese stockpiles have reached a ten-year low, with inventories at SHFE warehouses at their lowest level since 2015. In December, silver holdings in London vaults experienced a month-on-month increase of 2.3%, reaching a total of 27,818 tonnes, which underscores persistent investor interest. Citi has elevated its short-term silver projection to $150 per ounce, sustaining an optimistic perspective in comparison to gold.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 17.18% decline in open interest. Support is identified at Rs 2,59,265, beneath which prices could potentially examine Rs 2,52,870. Resistance is positioned at Rs 2,78,440, and a breakout may propel prices towards Rs 2,91,220.