In a notable reversal following weeks of sharp gains, silver prices in India and globally have experienced a substantial pull-back, raising fresh questions about the sustainability of the recent rally in precious metals. Analysts say the drop reflects profit-taking, easing safe-haven demand and signs of supply normalisation, but caution that the long-term fundamentals for silver remain intact.
In India on 18 October 2025, the price of 1 kg of pure silver (999-fine) fell to approximately Rs 1.72 lakh, down roughly Rs 13,000 in just one day and about Rs 18,000 over the preceding 72 hours On the commodities exchange front, silver futures slipped more than 8 % in one session, while internationally the metal dropped over 6 % from recent highs.
Market participants point to a mix of triggers. One key factor: the earlier run-up in silver was driven by heightened industrial demand (for solar panels, EVs, electronics), constrained physical inventories (especially in London/COMEX hubs) and elevated speculative positioning. But now several of those drivers appear easing. For instance, the intense shortage in London silver warehouses is showing signs of loosening, and major funds have pulled back or suspended new investments into silver ETFs in India amid premium compression. Additionally, remarks by U.S. officials easing trade tensions, stable U.S. bank credit-quality reports and a modest strengthening of bond yields have reduced the urgency for safe-haven metal purchases.
In the Indian festival context (with the Dhanteras/Diwali season underway), the timing is especially significant: silver had soared in recent weeks ahead of the traditional jewellery and coin-buying push. The correction therefore presents a mixed signal.
Industry bodies are already reacting: several Indian mutual fund houses temporarily suspended fresh investments in silver-ETF funds, citing the top-heavy valuations and distorted premiums in the physical silver market. Meanwhile, analysts who had previously raised price outlooks for silver remain cautiously bullish in the medium to long term pointing to supply-deficit profiles and upside potential, but warning that the days of unbroken gains may be behind us.