Rs 2 lakh off peak: Is it time to buy silver or wait for more correction?

Silver prices have corrected sharply from their record highs, falling nearly Rs 2 lakh, or around 45 per cent, from the January peak of Rs 4,39,337. The sharp fall has raised a key question for investors — whether to buy the dip or stay on the sidelines.

Gold has also seen a similar trend. Prices are down over Rs 51,000 from their peak of Rs 2,02,984 per 10 grams. While the correction makes valuations look attractive, volatility remains elevated. This is keeping sentiment cautious.

Why are prices falling despite global tensions?

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The decline comes amid a complex global backdrop. The failure of US-Iran talks has escalated tensions around the Strait of Hormuz. This has raised concerns over energy supply disruptions.

At the same time, crude oil prices have surged. Brent is near $103 per barrel and WTI is above $105. Rising oil prices are fuelling inflation fears and complicating the outlook for interest rate cuts.

Typically, such uncertainty supports safe-haven assets. However, higher rates and a strong dollar are weighing on bullion prices, creating an unusual divergence.

Silver remains supported despite volatility

Market expert Ajay Kedia said the broader structure for silver remains strong despite recent corrections.

“MCX Silver is once again reflecting the renewed strength, holding well above Rs 2,40,000, seen in the global bullion complex, as safe-haven demand, physical tightness, and structural supply deficits continue to support prices,” he said.

He added that after a volatile correction in March, silver has recovered in line with global markets. “Prices on COMEX rebounded nearly 2 per cent to $77.16 per ounce, driven by fresh geopolitical uncertainty and a softer US dollar,” Kedia said.

Dual demand, liquidity boost add support

Kedia highlighted silver’s dual role as a key support factor.

“The key support for silver remains its dual character as both a precious metal and an industrial metal,” he said.

He noted that macro risks are still present. “Ceasefire uncertainty between the US and Iran, continuing risks around the Strait of Hormuz, and persistent inflation concerns are keeping investment demand alive,” he said.

On the monetary side, he pointed to rising liquidity. “The Federal Reserve’s recent $20 billion balance sheet expansion, taking liquidity addition since its policy pivot to nearly $158 billion, is reinforcing the monetary case for silver as a hedge against currency debasement,” Kedia added.

Physical market tight; demand outpaces supply

Kedia said the physical market remains structurally tight.

“China imported a record 790 tonnes in the first two months of 2026, with February alone accounting for 470 tonnes, while local Chinese premiums surged to nearly $8 per ounce above COMEX, signalling strong physical demand,” he said.

He added that global demand continues to exceed supply. “Solar alone is projected to consume 160 million ounces in 2026, while broader industrial fabrication remains near 650 million ounces,” he said.

Silver outlook: key levels to track

On the near-term outlook, Kedia said silver will remain headline-driven.

“Silver remains highly headline-driven in the short term as long as holding above Rs 2,36,500, while resistance remains towards Rs 2,48,000,” he said.

He added that the broader trend still favours strength. “Safe-haven demand, physical tightness, and sustained industrial offtake suggest that MCX Silver is likely to remain well supported, with corrections attracting fresh buying interest rather than triggering a deeper trend reversal,” Kedia said.