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Silver prices witnessed a sharp decline on Friday, February 6, as heavy selling pressure and rising market volatility pushed rates significantly lower in both domestic and global markets. After weeks of intense price swings, forced liquidation and weak investor sentiment contributed to a steep correction in silver futures.

On the Multi Commodity Exchange (MCX), silver futures plunged by 5.18%, settling at approximately ₹2,31,175 per kilogram. This marks one of the biggest single-day drops in recent sessions, highlighting increased nervousness among traders and investors.

Meanwhile, spot silver in the physical market is trading around ₹2,99,000 per kilogram, reflecting continued weakness despite some buying interest at lower price levels.

Why Did Silver Prices Fall So Sharply?

The sudden decline in silver prices is being driven by a mix of domestic trading factors and global economic developments, including:

• High volatility in precious metals markets

• Forced selling after recent sharp price fluctuations

• Weak global demand outlook

• Investor caution amid macroeconomic uncertainty

• Profit booking by short-term traders

Although some buyers entered the market at lower levels, overall sentiment remained cautious as investors reacted to international market signals.

Global Silver Market Under Pressure

Silver prices also came under heavy pressure in the international market. On February 5, silver prices on Comex dropped to $70.47 per ounce, reflecting a decline of about 8.1% compared to the previous closing price.

Key global factors affecting silver include:

• Rising market volatility

• Fresh rounds of selling by institutional traders

• Geopolitical developments impacting safe-haven demand

• Shifting expectations around US interest rates

Geopolitical Developments Influence Market Sentiment

Recent geopolitical events have added uncertainty to financial markets. Reports of the US Navy shooting down an Iranian drone in the Arabian Sea temporarily increased safe-haven demand for precious metals. Additionally, investors are closely watching the upcoming Iran–US nuclear discussions, which could influence global risk sentiment.

At the same time, US President Donald Trump signed a spending agreement, bringing an end to a partial US government shutdown. While this move restored some stability in financial markets, it was not enough to reverse the bearish trend in silver prices.

Signals from China and the United States Add Pressure

Silver prices were further impacted by economic signals from major global economies:

China’s Gold ETF Outflows

China recently witnessed large withdrawals from gold ETFs, totaling nearly $1 billion. This reflects weakening investor confidence following the recent correction in precious metal prices.

Weak US Employment Data

According to ADP employment figures, the US private sector added only 22,000 jobs in January, significantly below market expectations. This raised concerns about slowing economic momentum.

Federal Reserve Outlook

US Federal Reserve Governor Lisa Cook indicated that inflation risks remain elevated, suggesting that further interest rate cuts may be difficult. Higher interest rate expectations generally weigh on non-yielding assets like silver and gold.

Expert Outlook: What Could Happen Next?

According to a February 6 report by Augmont, silver prices may continue to consolidate in the range of $74 to $91 per ounce, which translates roughly to ₹2.35 lakh to ₹2.85 lakh per kilogram in Indian markets.

Key Expert Projections

• Silver could remain weak but stable within a defined range

• Traders are advised to buy on dips and book profits during price rallies

• If prices fall below $74 per ounce, further downside toward $69 per ounce (around ₹2.20 lakh per kg) may be possible

• High volatility suggests greater risk for short-term traders

Market analysts recommend a cautious strategy, as unpredictable price swings could continue in the near term.

Latest Silver Prices in Major Indian Cities (Per Kg)

Investor Strategy: How to Approach Silver Now

With volatility remaining high, experts advise investors to:

• Avoid aggressive short-term speculation

• Consider accumulating silver gradually on price dips

• Monitor global economic indicators, especially US interest rate trends

• Keep an eye on geopolitical developments and ETF flows

While silver remains an attractive asset in the long run due to industrial demand and inflation-hedging potential, short-term price movements are likely to remain highly unstable.