Is Silver's Record Surge Over $84 Just a Temporary Retreat?
Click to start listening
Synopsis
Silver prices have undergone a dramatic retreat after hitting an all-time high of $84 per ounce, attributed to profit-taking amid a backdrop of market volatility. Analysts anticipate potential support and resistance levels as global tensions and economic factors continue to influence precious metal investments.
Key Takeaways
- Silver prices retreated after hitting $84 per ounce.
- Profit booking contributed to an 8% decline from the peak.
- March silver futures on MCX showed a 4.22% increase.
- Geopolitical tensions and economic factors drive market activity.
- Support and resistance levels are crucial for future trading.
Mumbai, Dec 29 (NationPress) Silver prices in the international markets saw a significant drop after reaching unprecedented intraday highs of $84 per ounce in the spot market on Monday.
The precious metal declined by as much as 8 percent from its peak due to aggressive profit-taking, halting a potential seventh consecutive day of increases.
On the MCX, March silver futures were trading up 4.22 percent intraday (as of 10:10 am), priced at Rs 2,49,282 per kilogram. Globally, futures peaked at an intraday high of $82.67 an ounce in early trading, marking a 7 percent rise following an 11 percent surge on Friday—the most substantial single-day gain since 2008.
Such price levels indicate that silver has maintained a rally, surpassing even the notable supply crunch witnessed in October.
Market analysts noted that thin holiday trading conditions intensified the price fluctuations, as lower volumes led to exaggerated price movements. The ongoing tight inventories and the liquidity that can vanish quickly are fueling the rally.
Unlike gold, which has a reserve backing in the London market estimated at around $700 billion in bullion that can be lent during liquidity crises, silver lacks such a safety net.
Despite a remarkable 180 percent increase year-to-date in 2025, with three trading sessions left, silver is poised for its best annual performance since 1979, when gains surpassed 200 percent.
“A weakening dollar index, anticipated Federal Reserve rate cuts, and escalating geopolitical tensions have bolstered the rally. The dollar index has fallen for the fifth consecutive week, fueled by expectations of continued US monetary easing. Renewed tensions between the US and Venezuela have also heightened safe-haven buying,” stated Rahul Kalantri, VP Commodities at Mehta Equities Ltd.
China's proposed silver export restrictions, set to take effect in January 2026, triggered a sharp rally in silver, while ongoing global uncertainties keep investment flowing into precious metals.
“Silver has support levels at Rs 2,38,810 to Rs 2,37,170 and resistance at Rs 2,41,810 to Rs 2,43,470,” he added.
aar/na
Point of View
I recognize the significance of silver's recent price fluctuations. The market's response to geopolitical tensions and Federal Reserve policies reflects broader economic trends. While the retreat from record highs raises questions, it also underscores the volatility that investors must navigate in the precious metals market.
NationPress
29/12/2025
Frequently Asked Questions
What caused the recent drop in silver prices?
The sharp decline in silver prices was primarily driven by strong profit booking after reaching record intraday highs, alongside thin holiday trading conditions that exaggerated price swings.
What are the current support and resistance levels for silver?
Analysts have indicated that silver has support levels at Rs 2,38,810 to Rs 2,37,170 and resistance levels at Rs 2,41,810 to Rs 2,43,470.
How has geopolitical tension affected silver prices?
Escalating geopolitical tensions, particularly between the US and Venezuela, have driven safe-haven buying, contributing to the recent volatility in silver prices.
What are the expectations for silver in 2025?
Despite the recent retreat, silver prices are up around 180% so far in 2025, positioning them for potentially the best annual performance since 1979, when gains exceeded 200%.
How does silver compare to gold in market stability?
Unlike gold, which has a significant reserve backing in the form of bullion, silver lacks such a safety net, making it more susceptible to rapid price fluctuations.
