Silver's Paradox: From Recent Highs To Over 6% Weekly Fall — Where Prices Are Seen Next

Silver seems to be losing its shimmer after touching record high at Rs 1.70 lakh per kg on Oct. 17. The week has been chipping away at the white metal, tarnishing its glory with nearly 6% weekly plunge in silver rates at India's Multi Commodity Exchange.

Similarly, US spot silver has slumped 6.16% this week, after reaching a high of $54.49 a troy ounce on Oct. 17.

Spot silver's decline this week is on the lines of gold, with the slide linked to strong recovery in the dollar and easing safe haven buying, stated ICICI Securities in a note.

Silver's rise has been consistent for the past couple of months, and in the recent weeks, the devil's metal soared to new highs due to a severe supply squeeze in London's commodity market.

In India as well, silver began climbing to the metal throne in the days leading up to the festive Diwali and Dhanteras season. It outshone gold to emerge as the top performer this Diwali, soaring 60% over the year as compared to a 55% jump in gold.

However, the silver frenzy has cooled this week, which has raised cloud over the historic bull run. So, are silver's glory days over?

According to analysts at Kotak Securities, if the metal continues its decline, the immediate support for the December futures traded at MCX lies at Rs 1,44,334 per kilogram.

If this level is breached, then the support lies at Rs 1,42,905; and a further decline could plunge the rates to as low as Rs 1,38,281.

On the other hand, if silver prices rise, then the immediate resistance for the metal lies at Rs 1,48,958, followed by Rs 1,50,387 and Rs 1,55,01 on the MCX.

For spot silver, immediate support is placed at $47.50 an ounce, followed by $47 and then $45.45, they said. On the higher side, the poor man's gold faces immediate resistance at $49.05, followed by $49.50 and then $51.10.