Silver price plunge over 40% leaves Indian dealers with mounting stockpiles

After a seven-month slide that erased more than 40% of its value from a January peak above Rs 4 lakh per kilogram, silver is now trading near Rs 2.35 lakh in Mumbai’s spot market. The correction has not sparked a buying surge; investors who bought at higher levels are reluctant to add to positions, and demand for silver ETFs, bars and coins has weakened. Domestic bullion dealers and refiners have placed orders for roughly 2,000 tonnes of the metal, which are currently in transit, prompting concerns about inventory buildup given India’s annual import of about 7,000 tonnes.

Analysts attribute the slump to uncertainty over a possible US-Iran war resolution and to reduced industrial consumption, as the solar, semiconductor and electric-vehicle sectors shift toward cheaper metals. Some long-term investors view the low price as a diversification chance, but short-term buyers are warned that the decline does not guarantee an immediate rebound.