Silver Plunges Below ₹2 Lakh, Erasing 2026 Gains

Silver has experienced a significant price drop, falling below ₹2 lakh per kg on the Multi Commodity Exchange (MCX) for the first time since December 2025. This sharp decline has eliminated the metal's gains for 2026 and represents more than a 50% decrease from its record high in January. On Friday, silver reached ₹1,92,800 per kg, following a substantial single-session loss.

The current downturn is largely attributed to rising crude oil prices, persistent inflation worries, and anticipated tighter monetary policies from the US Federal Reserve. Brent crude nearing $115 per barrel and geopolitical tensions in the Middle East are fueling inflation concerns. This environment prompts central banks to consider maintaining restrictive policies, thereby increasing bond yields and the opportunity cost of holding non-interest-bearing assets like silver.

Analysts note that silver's industrial uses also make it vulnerable to elevated borrowing costs. While some see the current sharp correction as a potential buying opportunity, others caution about further price declines. Technical analysis suggests possible support around ₹1,80,000 to ₹1,85,000, with a medium-term rebound of 10-15% anticipated if prices stabilize. Key factors influencing future movements include crude oil prices, US inflation data, and Federal Reserve policy expectations.