MUMBAI — Precious metals experienced a sharp correction on the final trading day of the year as investors locked in profits following an unprecedented bull run. Silver futures for March 2026 delivery on the Multi Commodity Exchange plummeted 4.63 percent to 239,395 rupees per kilogram on Wednesday morning, while gold futures for February 2026 delivery saw a more modest decline of 0.51 percent, settling at 135,973 rupees per 10 grams.
Despite the session’s retreat, the broader performance for 2025 remains historic. Silver has surged 24 percent in December alone and is up a staggering 135 percent on a year over year basis. This rally has been underpinned by a combination of tight supply demand fundamentals and sustained safe haven interest. Similarly, domestic spot gold prices have increased by more than 76 percent year to date, putting the metal on track for its strongest annual performance since 1979.
Market volatility remained high throughout the week, driven by a series of geopolitical escalations. Safe haven demand spiked following reports of U.S. strikes on Venezuelan port facilities and Chinese naval exercises near Taiwan. Furthermore, setbacks in the Russia Ukraine diplomatic process—sparked by allegations of a drone attack on the Russian presidential residence—briefly pushed prices to intraday highs on Tuesday before the current bout of profit taking took hold.
According to Rahul Kalantri, Vice President of Commodities at Mehta Equities Ltd., while geopolitical tensions provided a floor for prices, gains were ultimately capped by the Federal Reserve. Recent policy meeting minutes have signaled a more hawkish stance, dampening investor expectations for aggressive interest rate cuts in the coming year. Kalantri noted that silver currently finds technical support between the 245,150 and 242,780 rupee zones, with resistance seen up to 256,970 rupees.
Institutional analysis suggests that the rally in silver is also a result of structural deficits. A recent report from Motilal Oswal Financial Services Ltd. highlighted persistent inventory drawdowns across global trading hubs and delivery pressures that have exposed a lack of available physical silver. These supply constraints, coupled with aggressive central bank buying and robust inflows into gold and silver exchange traded funds, have fundamentally reshaped the precious metals landscape over the past twelve months. (Source: IANS)
