Silver Slump: MCX Rates Plunge By Rs 10,000 Intraday—Is White Metal Staring At Downside Risk?

Silver Slump: Silver prices traded volatile and extended losses for a second straight session on Thursday, Jan. 8, 2026 as investors braced for futures selling tied to the commodity index reshuffle, with a stronger US dollar adding pressure by making the metal costlier for overseas buyers.

This comes after traders in global and domestic markets took to profit-booking in yesterday's session, after futures hit record highs. Meanwhile, the US dollar hovered near a one-month high today as investors assessed mixed economic data ahead of Friday’s nonfarm payrolls report.

The white metal plunged by Rs 10,000 during the intraday. After closing at Rs 2,50,605 per kilogram on Wednesday, silver futures, due for a March 5 expiry, dropped sharply to an intraday low of Rs 2,40,581 on the multi commodity exchange (MCX). The contract has shed over 4% in the session so far.

Spot silver also plunged 4.3% to $74.8 per ounce, after hitting an all-time high of $83.62 on Dec. 29, 2025. The choppiness and sudden downside trend comes after the precious metal recorded its strongest annual gain in 2025, soaring over 147% on rising industrial and investor appetite.

US job openings dropped to a 14-month low in November while hiring resumed its sluggish tone, pointing to ebbing labor demand. Investors await the US non-farm payrolls data for more clues on monetary policy. Wall Street has priced in two interest rate cuts by the Federal Reserve this year.

Non-yielding assets such as gold and silver tend to perform well in low-interest-rate conditions and during periods of geopolitical or economic uncertainty. Notably, the risk premium triggered by US-Venezuela crisis lifted the safe haven appeal of precious metals in trade after the historic run in 2025.

The annual Bloomberg Commodity Index rebalancing, designed to keep the index aligned with the current state of the global commodity market, begins this week. The Bloomberg Commodity Index target weight is being reduced from 9.6% to 3.9%.

"Gold and silver remain under pressure as the annual commodity-index rebalancing gets underway. Over the next five days, COMEX futures could see selling in the region of $6 to $7 billion in each metal," Ole Hansen, head of commodity strategy at Saxo Bank told news agency Reuters.

"The US-Venezuela conflict added a small geopolitical risk premium at the beginning of the week which is now deflating as the attention turns to the rebalancing," Hansen added. Citi Research expects ~$6.8–6.9 billion of rebalancing outflows during Jan 8–14 the index rebalancing window.

''Silver will likely experience the largest liquidity impact from rebalancing outflows. The price impact could be pronounced, even if the selling is temporary and non-fundamental,'' said Citi Research on silver.

HSBC expects silver to trade between $58 and $88 in 2026, supported by lingering tightness in physical markets, robust investment flows and gold's continued strength. However, it warned of a market correction later in the year.

According to a fresh outlook from HSBC Global Research, the metal is likely to remain buoyant through the first half of 2026 before its meaningful correction later this year as supply responses kick in and demand cools. HSBC expects silver prices to stay elevated in the near term.

The bank notes that silver surged to a record $83.60 per ounce last month, driven by acute shortages of deliverable metal, sharp backwardation in futures markets and heavy ETF inflows. These conditions are unlikely to ease quickly, keeping volatility high and prices supported through H1.

In domestic markets, Kotak Securities said that markets brace for the annual rebalancing of major commodity indexes, a process expected to trigger billions of dollars in futures selling over the coming days.

''Passive index-tracking funds are reducing precious metals exposure from Thursday to align with revised weightings, magnifying pressure after last year’s sharp rallies. Silver remains particularly exposed amid elevated volatility,'' said the brokerage.

According to Kotak Securities, spot silver has key support levels at $69.36, $73.06, $74.21 and resistance at $77.91, $79.05, $82.75. MCX silver futures has key support at Rs 2,25,966, 2,35,877, 2,38,938 and resistance at Rs 2,48,848, 2,51,909, and 2,61,820. Hence, analysts expect more volatility and near-term correction in silver prices. They believe the near-term headwind is technical and calendar-driven, not structural for silver.