MCX Silver Tumbles 3% Amid Global Price Decline

MCX silver futures plunged by nearly 3% to Rs 2,32,315 per kg on Tuesday, following a sharp decline in global prices. The primary cause of this drop is the 6% fall in global spot silver, which currently stands at around $73 per ounce. This weakness has been ongoing for three weeks, with precious metals experiencing a correction after an earlier speculative rally.

The surge in silver to above $120 per ounce in late January was largely driven by aggressive buying from Chinese traders. However, this rally soon corrected as leveraged positions were unwound and investors liquidated holdings to manage losses in other asset classes. The current global weakness is now directly reflected in MCX contracts.

Market holidays across China, Hong Kong, and parts of Asia led to relatively thin trading volumes, which often exaggerates price movements and intensifies volatility in commodities like silver. With Asia being a key demand and trading hub for metals, reduced participation added to the downside pressure.