Silver Prices Stabilize but Remain Below Recent Peaks

Silver prices showed minimal movement on October 17, 2023, trading at approximately Rs 1,56,755 per kilogram, which is about 8 percent below recent peak levels. The precious metal gained 0.1 percent during the session but has faced downward pressure as investors engage in profit-booking.

The previous trading day on the Multi Commodity Exchange (MCX) saw silver futures decline significantly. Prices dropped nearly 10 percent from session highs, falling from Rs 1,70,415 per kilogram to a low of Rs 1,53,700 before closing at Rs 1,57,300, reflecting a modest increase of 0.44 percent from the prior close.

Market Dynamics and Factors Influencing Prices

Global silver prices also faced a downturn, slipping from a record high of nearly $54 per ounce to approximately $51.50, marking a 6 percent decline. Analysts attribute this drop to reduced demand for safe-haven assets, largely stemming from easing tensions in US-China trade relations. US President Donald Trump acknowledged that additional tariffs were unsustainable, which influenced investor sentiment.

In a report from the brokerage firm Motilal Oswal, it was noted that the current market dynamics differ from past speculative cycles, suggesting that the ongoing rally is underpinned by fundamental factors. The volatility of silver is currently approximately 1.7 times that of gold, indicating a more stable foundation for this price movement compared to historical spikes seen in 1980 and 2011.

Industrial Demand and Future Projections

The extensive application of silver in manufacturing has bolstered demand and contributed to price elevation. Factors such as stability in regional bank results, a reduction in liquidity constraints in the London market, and rising bond yields have collectively pressured non-yielding assets like precious metals.

Earlier this week, MP Financial Advisory Services highlighted that silver’s role as an industrial input could push its price beyond $50 per ounce. The report emphasized that “thanks to industrial demand, silver has the required merits to cross over the $50 mark this time.”

From November 2022 to October 2023, silver prices surged from $24 per ounce to around $47 per ounce, driven by strong demand in sectors such as solar energy, electronics, and electric mobility.

As investors continue to monitor market trends and geopolitical developments, the future trajectory of silver prices remains a focal point for both traders and industrial stakeholders.