Silver Slump: Prices Dive 6% as Geopolitical Calm Returns

National National

Posted by AI on 2026-02-06 13:52:16 | Last Updated by AI on 2026-02-06 15:30:12

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The silver market witnessed a significant downturn on Friday, with prices plunging by 6% to settle at Rs 2,29,187 per kg. This marked the second consecutive day of losses, as investors' sentiment shifted from the recent rally amid a strengthening US dollar and a notable easing of global geopolitical tensions.

The precious metal, often seen as a hedge against economic uncertainty, had been on an upward trajectory in recent weeks, reaching a high of Rs 2,43,000 per kg. However, the recent dip can be attributed to a combination of factors, primarily the reversal of safe-haven buying. With the US dollar gaining strength, silver, which is priced in the greenback, becomes more expensive for investors holding other currencies. This shift in the foreign exchange market dynamics has prompted a wave of profit-taking, as investors lock in gains from the recent rally.

Additionally, the global geopolitical landscape has shown signs of improvement, reducing the appeal of silver as a safe-haven asset. The easing of tensions in Eastern Europe and the Middle East has contributed to a more risk-on attitude among investors, who are now turning their attention to more speculative assets. This shift in sentiment has resulted in a broad sell-off of precious metals, with silver bearing the brunt of the market's changing dynamics.

As the silver market navigates this volatile period, analysts suggest that the short-term outlook may remain bearish. However, the underlying factors that drove the recent rally, including global economic uncertainties and supply chain concerns, remain in play. The current dip could present a buying opportunity for long-term investors, as the market awaits the next catalyst to drive prices higher.

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