Silver Price Surge Triggers Financial Crisis In Rajkot; 44 Traders Shut Shop: Report

A story published in local Rajkot-based newspaper Gujarat Mirror claims the rapid surge in silver prices across the globe has triggered a crisis, with up to 44 traders in the city declaring insolvency.

The report states that these firms were forced to declare insolvency after failing to pay outstanding liabilities reaching up to a combined total of Rs 3,500 crore.

The crisis unfolded when these Rajkot-based traders, who were betting on silver prices to remain stable, were caught in a short squeeze that led to rates skyrocketing beyond Rs 1.25 lakh per kilogram.

Gujarat Mirror reported on Tuesday that the volatility in silver prices trapped numerous traders, who had sold silver short, expecting prices to cap after a stellar 2025 that saw the precious metal deliver outstanding returns.

But when the market rallied further, the gap between the selling price and the market rate - known locally as valan - ballooned to unmanageable levels.

The silver traders subsequently held an emergency meeting Saturday night, where 44 traders reportedly admitted their inability to settle debts and thereby surrendered to the market crash.

This shockwave has sent shockwaves through trading networks beyond Rajkot, extending to cities like Ahmedabad, Indore and even Dubai, where all the connected liabilities are now being tallied.

"The dealers were confident the price would not cross the Rs 1.25 lakh threshold and continued to sell," the report stated. "When the prices crossed that mark, the financial burden of the price difference became impossible to bear.". Some traders have reportedly shuttered their shops and fled the market in the wake of the crash.