Silver prices in India today underwent yet another big correction on Friday morning. Till yesterday, the silver rate in India was slowly getting on the track of recovery after sustaining the biggest crash in history. Gold & silver this year recorded some extraordinary gains, where both precious metals jumped to record high levels. However, the rally was short-lived, and silver prices came tumbling down more than 30%.
One of the major impacts on the silver price in India is from the international market, where spot silver gained more than 2% in the previous session after better-than-expected job data, which reduced expectations of a future rate cut from the Federal Reserve.
Silver Rate in India Today
On February 13, the retail silver rate in India fell sharply by Rs 15000 per kg to cost Rs 280,000. Similarly, 100 grams of silver cost Rs. 28,000 after declining by Rs. 1500.
Silver prices in other major metropolitan cities also mirrored the sentiments. Silver prices in Chennai & silver prices in Hyderabad today dropped even more, as 1 kg of silver in Chennai & Hyderabad fell by Rs. 20,000 to cost Rs. 280,000 per kg. Meanwhile, Bangalore silver prices today, on February 13th, are Rs 280,000 per 1 kg, which fell by Rs 15,000.
Silver Futures Prices on the MCX
On the Multi Commodity Exchange (MCX), silver futures for the March 5 expiry rebounded modestly after the steep fall seen earlier. At the time of writing, MCX silver futures were trading at around Rs. 243,151 per kg, up about 2.84%, showing some short-term recovery after the correction.
According to ICICI Direct, “MCX Silver March is expected to slip towards the Rs. 250,000-Rs. 240,000 level as long as it stays below the Rs. 271,000 level.
Silver Price Analysis
“While silver may be past its most brutal phase of selling, there are signs that it isn’t quite back to normal yet. Silver’s term structure of volatility is inverted, with front-end volatility pricing sharply elevated. One-week volatility, for instance, is pricing a decline to as little as $74.60 an ounce within its expiry, implying that option sellers are factoring in a decline of more than 10% from the current spot rate. Silver’s RSI, which has come off its overbought levels, has stabilised but is far from levels that would suggest the recent frenzy, which saw spot pricing surge from around $72 an ounce at the start of the year to close to $122, has completely died down. A framework that looks at silver’s correlations with gold over time suggests its indicated value at $63, meaning despite the recent selling, it is still overvalued by about $20 an ounce.” as per IBJA.
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