Top News

Even though silver prices are setting record after record, from the country's futures market to the Delhi bullion market, a significant drop in silver prices may be seen in the coming days. According to experts, the international target for silver prices is $100, and the target for the domestic futures market is Rs 3.25 lakh. If silver reaches these target levels in both markets, a significant decline in prices could occur.

According to experts, silver is currently quite overvalued. The reason for this is tariff tensions. Recently, Trump imposed tariffs on European countries over Greenland. However, pressure on Trump to remove these tariffs may increase in the coming days. On the other hand, a recovery in the dollar index could also act as a major factor and bring down silver prices.

After medicines, Trump now targets alcohol; the price of this liquor could triple.
The metals replacement theory suggests that investors may shift their focus from silver to other metals like copper and aluminum. This would lead to a decrease in demand and, consequently, a fall in prices. The gold-silver ratio could also be a major factor, which is currently at a 14-year low. It is expected to rise. Profit-taking by investors is also seen as a major factor in bringing down silver prices.

The remarkable thing is that silver prices have increased by 54 percent in the last month. On December 17, silver prices closed at Rs 2 lakh for the first time, while on January 19, silver prices reached the Rs 3 lakh level for the first time. This means that silver prices have increased by more than Rs 1 lakh in just one month. Experts say that silver prices could fall by up to 30 percent from their peak, i.e., by Rs 1 lakh or more. The biggest question now is whether such expensive silver will remain attractive to investors in the coming days. Let's try to understand this in detail…

First, understand the target.
According to experts, a target has been set for silver prices, from the international market to the country's local futures market. First, let's talk about the international market, where the target price for silver is $100 per ounce. Currently, it is trading at around $93 per ounce. This means that silver needs to rise by $7 per ounce to reach $100 per ounce. On the other hand, in the country's futures market, the target price for silver is set at the level of 3.25 to 3.30. Currently, silver prices on MCX are below 3.20. Therefore, silver needs to increase by more than 10,000 rupees to reach 3.30. A decline in silver prices is possible at this level.

What could be the reasons for the decline?
Potential reduction in tariffs: The main reason for the current surge in silver and gold prices is Trump's tariffs. This is forcing investors to move towards safe-haven assets. According to experts, relief on tariffs may be seen in the coming days. Imposing tariffs on European and Middle Eastern countries means self-inflicted damage for the US. Recently, Trump announced Greenland tariffs, which will be implemented from February 1st. After that, the 10 percent tariff will increase to 25 percent from June. Experts estimate that these tariffs may be withdrawn before February 1st.
Recovery in the Dollar Index: On the other hand, a significant recovery has been seen in the dollar index. In the last month, the dollar index has increased by 1 percent. On Monday, the dollar index was at the 99 level, which decreased to the 98 level on Tuesday morning. However, experts believe that the dollar index may increase further in the coming days, which could lead to a decline in silver prices. Investors' Replacement Theory: Gold and silver prices are at record levels. Experts say that silver prices have risen so high that returns at this level may be quite limited. Therefore, investors are now adopting the replacement theory and shifting their focus to other metals. According to experts, copper could be the next target for investors. Copper has given investors very good returns in the past few months. Due to its lower value, copper could be a hot commodity this year.
Gold-Silver Ratio: Currently, the gold-silver ratio is at the 50 level, which is a 14-year low. This means that the demand for silver remains very high, leading to continuous investment. However, there are chances of it rising from here. The reason for this is the price of silver, which has increased so much that the possibilities of returns on investment from this point are quite low.

Fed Rate Cut Discount: After the inflation and employment data, there are chances that the Fed might cut interest rates this time. The Fed meeting is scheduled for the last week of January, which supports metals. Experts believe that the Fed rate cut has already been discounted. Its effect will no longer be seen in gold and silver prices. More important will be the commentary from the Fed chairman, which will indicate whether there will be further rate cuts in the remaining months of the year.

Disclaimer: This content has been sourced and edited from TV9. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.