Why silver price is falling sharply today

That is Rs 4,703 lower than the previous day’s close of Rs 1,89,453 per kg. Silver future price is effectively down 2.48% from the previous day. Even after falling 50% from its all-time high, silver is still facing downward pressure. The trigger was a hotter-than-expected US inflation reading. Pressure on silver seems to have increased in the last 24 hours. The main reason is the US PCE data released on Thursday, which shows that worries around inflation are rising, not fading away.

The US PCE price index rose 0.5% month on month in September, the largest gain since March. Annual inflation accelerated to 3.6%. Core PCE inflation also increased to 3.1% year on year. And the data did not stop there. US GDP rose at an annualized pace of 3.4% in the third quarter, above predictions of 3.2%. It was driven by sustained consumer spending and strong AI-related investment. Persistent inflation and resilient economic growth in the US are reinforcing expectations of a potential Federal Reserve rate hike later this year.

And that is bad news for the precious metals. Why do higher rates hurt gold and silver? Precious metals like gold and silver are non-yielding assets. The opportunity cost of holding them rises when interest rates are high. Investors, therefore, prefer holding dollar-denominated assets over them. 41 lakh, silver below Rs 2 lakh: What should investors do now? What are the markets betting on now? The Federal Reserve held interest rates constant on Wednesday, ahead of next week’s US midterm elections.

Even so, markets continue to assign approximately a 75% probability of a rate hike in December, according to the CME FedWatch Tool. Stronger US inflation figures have strengthened expectations that the Federal Reserve would maintain high interest rates or think about raising them again in December. Before that, another set of inflation figures will arrive. The Consumer Price Index for October 2026 is scheduled to be released on November 10, 2026.

Silver price in India ParticularsPriceMCX spot silver (Friday)Rs 1,84,035/kgPrevious close (Thursday)Rs 1,90,401/kgDaily declineRs 6,366/kgDaily decline (%)3.30%January 29 peakApproximately 2 × current priceFall from January 29 peakApproximately 50% Source: MCX India Global silver heads toward $50 In the international market, silver prices declined toward $50 an ounce on Friday, sinking to the lowest since November 2025.

Silver is on track to decline about 16% in October, potentially recording its second consecutive monthly loss. From an all-time high of $121 hit on 29 January this year, the drop is over 55%. Silver supply is enough. Available inventories have risen to about 267 million ounces. That is nearly double the lows recorded in October 2025. Where did the extra metal come from? According to Metals Focus, global silver-backed exchange-traded products have seen holdings fall by around 60 million ounces this year.

This has released previously unavailable metal back into the physical market, Kitco reports. Why the 2025 squeeze may not return The bull run in silver was driven by a supply squeeze in 2025. But the picture has changed. The changing supply-and-demand outlook suggests silver is unlikely to see another significant physical market squeeze in the near term. Amidst falling industrial demand and increase in supply, silver prices are likely to remain under pressure.

Silver Price Performance Period / benchmarkReturn / changeJanuary 29 peak to FridayApproximately -50% (in USD)October 2026Approximately -16% (in USD)Daily spot silver change in India-3.30%Daily MCX silver futures change-2.48% Source: MCX India; Trading Economics Will Dhanteras buyers step in? The 50% price correction in silver may encourage some buying ahead of Dhanteras and Diwali. The price may witness further pressure downwards, and Indian consumer demand for silver jewellery is likely to show a muted pace this year.

For investors, it is better to remain cautious at least in the near term. They should avoid catching falling prices. Rates and yields add to the risk. Higher interest rates and bond yields could create further downside risks in the near term. Keep an eye on the dollar, US bond yields and fresh inflation signals before increasing exposure. Disclaimer: This article is intended for informational purposes only and should not be construed as investment advice, financial guidance, or a recommendation to buy or sell any asset.

Silver prices are subject to market volatility and may rise or fall without notice. Past performance is not indicative of future returns. Readers are advised to exercise due diligence and consult a qualified financial advisor before making any investment decisions.