Silver Price Crash: Silver prices witnessed sharp selling pressure in the domestic futures market on Thursday. On MCX, March 2026 silver futures slipped by nearly ₹10,000 per kg during intraday trade . The metal had closed at ₹2,50,605 per kg on Wednesday but fell to a low of ₹2,40,605 per kg in early trade on Thursday.
This marks the second consecutive session of steep losses in silver.
By around 3:20 PM, MCX silver futures were trading near ₹2,43,300 per kg, down over ₹7,000 from the previous close. The sharp movement highlights rising volatility in the precious metals market.
Annual Rebalancing Increases Selling Pressure
Market experts say one of the key reasons behind this decline is the annual rebalancing of major commodity indices, including the Bloomberg Commodity Index. These indices adjust their weightings every year based on past price performance.
After a strong rally in precious metals in 2025, the impact of rebalancing is being felt more strongly this time, leading to profit booking and position adjustments.
Passive Funds Reduce Exposure
Passive funds tracking these indices have started cutting their silver positions to align with the new weightings. This reallocation has added to the selling pressure not only in silver but also, to some extent, in gold.
Correction After Record Rally
In December 2025, silver touched an all-time high of $83.60 per ounce amid tight supply conditions. The market had seen an exceptional rally during that phase. The current fall is being seen as a natural correction after such a strong upward move, combined with profit booking by traders.
HSBC: Current Rally May Not Be Sustainable
In its latest report, HSBC said that the pace of silver's rally appears to be losing momentum. The bank noted that prices have reached unsustainable levels amid high volatility.
While gold continues to get support from safe-haven demand, silver is facing weakness in industrial and jewellery demand, which could limit further upside.
Silver Outlook 2026: What Do Forecasts Say?
According to HSBC's 2026 outlook, the bank has raised its average silver price forecast for next year to $68.25 per ounce, up from the earlier estimate of $44.50.
However, HSBC also expects:
- Prices to ease to around $57 per ounce in 2027
- Further decline to nearly $47 per ounce by 2029
This indicates potential pressure on silver prices in the long term.
Weak Demand, Rising Supply Signals
HSBC believes that a weaker US dollar and institutional investments may offer short-term support to silver. However:
- Industrial demand is gradually slowing
- High prices are hurting jewellery consumption
- Mine production, by-product recovery and recycling are increasing supply
These factors together could keep pressure on prices.
Falling Supply Deficit Could Limit Upside
The report estimates that:
- The silver supply deficit may be around 230 million ounces in 2025
- It could fall to 140 million ounces in 2026
- And further drop to 59 million ounces in 2027
A declining deficit and rising above-ground inventories may cap long-term price gains.
What Should Investors ?
Overall, experts believe that high volatility will continue in the near term. With changing demand-supply dynamics and global factors at play, the sustainability of the current rally is under question. This is also why stocks linked to silver, such as Hindustan Zinc, have witnessed selling pressure recently.