As investors stare at wild swings, jewellers & goldsmiths seek probe into MCX silver anomaly

Amidst wild swings in domestic silver prices, a section of jewellers in the country has raised certain concerns about a premium anomaly in silver futures trading on commodity derivative exchange MCX, seeking a formal investigation into the matter. According to the All India Jewellers & Goldsmith Federation (AIJGF), which represents thousands of jewellers, bullion dealers and goldsmiths, MCX silver futures traded at an abnormal premium of Rs 18,184 per kg on Wednesday, "significantly deviating from global parity benchmarks and domestic spot pricing".

Describing the premium as "outsized and unsynchronised", the jewellers' body raised serious concerns about possible price distortion, artificial rigging or coordinated influence on futures pricing that could undermine market integrity. Calling for a formal probe into the premium anomaly, AIJGF urged the market regulator to direct MCX to provide clarity on pricing divergence versus global parity.

It also requested SEBI to ensure that genuine hedgers are protected against unfair stop-outs and margin stress.

Add Zee Business as a Preferred Source

At 4:50 pm, near-month silver futures (March 5) were trading lower by Rs 14,116, or 5.6 per cent, for the day at Rs 2,36,896, having gyrated in a range of Rs 2,32,228-2,42,000 around the flatline in intraday trade. At this level, the white metal has declined by Rs 17,278, or 6.8 per cent, from its all-time high of Rs 2,54,174 registered on Monday.

According to the industry body, the "most affected stakeholders are small and mid-sized jewellers, who actively use MCX Silver futures to hedge inventory risk, especially those protecting themselves through exchange-linked hedging and ETF/futures arbitrage strategies".

Many of these hedges, noted the industry body, are executed with limited capital and tight risk buffers, and any manufactured premium or artificial pricing behaviour exposes them to avoidable stop-loss triggers, margin pressure and unfair financial damage, despite being on the right side of risk management practices.

The premium anomaly "does not reflect organic supply-demand pricing, and if left unchecked", according to AIJGF.

It also highlighted four possible outcomes of the anomaly:

• Unwarranted margin calls for genuine hedgers
• Distorted price discovery
• Losses for non-speculative market participants
• Reduced trust in exchange-based hedging instruments

"We trust SEBI's commitment to protecting non-speculative participants and ensuring robust price discovery. This timely probe will not only restore confidence but also safeguard the livelihoods of thousands of small jewellers who hedge responsibly to stabilize business risk," noted the industry body.

2025, a phenomenal year for silver investors

At the current levels, the global silver benchmark has risen 144 per cent for the year -- its best calendar year return in at least four decades.

A number of factors have boosted white metal rates in 2025, primarily robust industrial demand, persistent supply deficit, geopolitical uncertainty, favourable monetary policies and strong investment flows.

Many experts have attributed the current slump in silver rates to profit-taking amid easing geopolitical tensions, with the US striking an optimistic tone about a potential peace deal for Ukraine.

Jewellers flag abnormal Rs 18,184 per kg premium in MCX silver futures vs global & spot prices: A quick take

Here are answers to a few frequently asked questions (FAQs) on the subject:

What is the silver futures premium anomaly, according to jewellers?

Jewellers have flagged an unusually high premium in MCX silver futures, where contracts reportedly traded at Rs 18,184 per kg above global parity and domestic spot prices, raising concerns about abnormal price behaviour.

Why is the premium being described as abnormal?

According to a group of jewellers, the premium is outsized and unsynchronised, categorically deviating from global benchmarks and domestic spot prices. It does not reflect organic supply-demand dynamics, according to them.

Who are the most affected stakeholders?

Small and mid-sized jewellers are the most impacted by the alleged anomaly, particularly those using MCX silver futures for inventory hedging.​

Why are jewellers concerned about this issue?

AIJGF suspects possible price distortion, artificial rigging, or coordinated influence undermining MCX market integrity, especially harming small and mid-sized jewellers who hedge inventory via futures, ETFs, and arbitrage. These participants face unwarranted margin calls, stop-loss triggers, and financial damage despite proper risk management.​

What drove silver's strong 2025 performance?

Silver benchmarks rose 144 per cent in 2025 -- the best in at least four decades -- driven by industrial demand, supply deficits, geopolitical tensions, favourable monetary policies and investment flows.

What has hurt silver prices recently?

Profit-taking amid easing tensions, like US optimism on Ukraine peace, has caused the prices to fall from an all-time high scaled this week.

What risks does such a premium pose to the market?

The jewellers' body has warned that such anomalies could lead to price distortion, artificial rigging or coordinated influence. These conditions could potentially hamper market integrity and fair price discovery.