After a record-breaking rally that saw touch $95.80 per ounce and breach ₹3.20 lakh per kilogram, the white metal is experiencing a sharp correction. Silver settled around $91.50-$93 on Thursday, cooling from its historic highs as geopolitical tensions eased and investors booked profits following a stunning 30 per cent gain in just three weeks.
The trigger: Trump’s Davos remarks
The primary catalyst for Thursday’s decline was US President Donald Trump’s address at the World Economic Forum in Davos. “President Trump ruled out the use of military force to acquire Greenland, easing geopolitical concerns. This led to profit booking in precious metals,” said Rahul Kalantri, VP Commodities at Mehta Equities.
Trump also confirmed a NATO deal framework that suspended February 1st tariffs on eight allied nations, effectively neutralising the trade-war fears that had driven investors into safe-haven assets. Axis Securities noted that this “removal of trade-war tail risk sparked a buy-the-dip surge” in equity markets, with the Dow Jones rising 590 points and the S&P 500 gaining 79 points.
Renisha Chainani, Head of Research at Augmont, explained the market dynamics: “Gold and silver prices saw profit-booking as geopolitical tensions briefly eased after U.S. President Donald Trump withdrew his threat of new tariffs on European nations and signalled a softer stance on Greenland, saying a framework of a future deal had been agreed. His assurance that force would not be used, weighed on bullion prices and reduced immediate safe-haven demand.”
The de-escalation triggered what analysts called a “sell-the-fact” move in precious metals, with gold falling 0.9 per cent to $4,810 and silver dropping 0.5 per cent. “Comex Silver settled marginally lower around the $93 level as investors booked profits after the sharp, record-breaking rally,” Axis Securities added.
Supply dynamics and China’s role
Kaynat Chainwala, AVP – Commodity Research at Kotak Securities, highlighted another factor pressuring prices. “Silver prices have retreated from record highs on both COMEX and MCX following US President Trump’s moderated tariff rhetoric at the World Economic Forum and China’s record 5,100-tonne silver exports in 2025, the highest in 16 years,” she said.
However, she noted the market’s resilience: “Today, slipped below ₹306,000/kg earlier in the session amid easing geopolitical and trade war concerns. However, prices staged a sharp recovery, erasing most losses and now trading above ₹317,000/kg, tracking steady moves in international markets.”
ETF correction triggers concern
Some silver and saw sharp declines, with certain funds dropping as much as 21 per cent. “Several gold and silver ETFs fell sharply today (up to approximately 21 per cent) due to profit-booking and unwinding of speculative premiums after a strong rally, even as underlying prices corrected modestly. The move appears driven more by sentiment and liquidity than fundamentals,” explained Aditya Agrawal, CFA, Chief Investment Officer at Avisa Wealth Creators.
Justin Khoo, Senior Market Analyst at VT Market, contextualized the ETF moves: “Today’s sharp slump in silver and gold ETFs reflects an abrupt shift in macro sentiment rather than a fundamental breakdown in precious metals. The ETF correction looks like profit-taking and risk-rebalancing as equity markets rally.”
Risk-on sentiment pressures safe havens
The improved risk appetite also strengthened the US dollar and stabilized Treasury markets, with the 10-year yield falling 4 basis points to 4.26 per cent. “Markets pared gains after U.S. President Donald Trump eased tariff threats linked to Greenland, reducing near-term geopolitical risk and strengthening the U.S. dollar — a known headwind for bullion prices,” Khoo explained.
Will silver fall further?
Technical analysts are watching key support levels to gauge whether the correction will deepen. Kalantri identified silver support at $90.10-$87.75 globally and ₹3,04,810-2,92,170 domestically, with resistance at $95.15-$97 and ₹3,20,810-3,24,470 respectively.
Chainani offered a more optimistic technical outlook: “In silver, prices have also corrected, but the $90.5 level (approximately ₹3,00,000) continues to act as a strong support. As long as silver trades above this zone, the metal retains the potential to move higher towards the $99–100 range (approximately ₹3,50,000). Overall, dips are likely to attract buying interest rather than signal a trend reversal.”
Ponmudi R, CEO of Enrich Money, maintained a cautiously bullish outlook. “COMEX Silver is trading firm near $92–$93 after recently touching record highs above $95.80. While $90–$92 may see brief consolidation, a decisive move above $95 could accelerate the rally toward the psychological $100+ zone,” he said.
Chainwala added that “in the near term, silver prices are likely to remain volatile with traders cautious ahead of key U.S. economic data and the Bank of Japan’s monetary policy decision.”
Reality check on silver’s role
Anand Rathi Research Team offered perspective on silver’s risk profile. “Long-term volatility (1996–2025): Gold approximately 15 per cent versus Silver approximately 25 per cent versus Nifty 50 approximately 25 per cent,” they noted. Their analysis showed that while Nifty 50 delivered approximately 11-12 per cent CAGR over 1996-2025, gold managed about 9 per cent, and silver lagged at roughly 5 per cent. “Equities drive wealth; gold improves resilience, silver remains tactical and cyclical,” they concluded.
The structural story remains intact
Despite the correction, analysts believe fundamental drivers remain supportive. Chainani cautioned that “Trump’s continued rhetoric—warning NATO allies that opposition to his Greenland plans would be remembered—has kept underlying uncertainty alive. While near-term profit-taking has capped prices, persistent geopolitical risk and policy unpredictability continue to support the broader bull trend in precious metals.”
Khoo advised measured positioning: “With structural drivers such as central-bank accumulation, long-term demand and inflation hedging undiminished, disciplined investors may see this correction as a strategic accumulation zone,” though he cautioned against “aggressive short-term speculation given ongoing volatility.”
Agrawal suggested a practical approach: “Long-term investors may consider staggered allocation within asset allocation limits, while short-term traders should remain cautious amid continued volatility.”
Kalantri noted that “uncertainty surrounding U.S. trade tariffs and the prevailing sell-America narrative continue to underpin safe-haven demand, while rupee weakness is supporting domestic bullion prices.”
For now, the correction appears to be profit-taking after an extraordinary rally rather than a reversal of silver’s long-term bullish trend driven by industrial demand from solar, EVs, and electronics sectors.