Silver Exchange-Traded Fund falling by 15%
The shine of silver has faded, Silver ETF falling by 15%: Silver prices plummeted by 9% in early trading today on the Multi-Commodity Exchange (MCX). A sharp decline in global spot silver prices exerted significant pressure on the domestic market. The metal initially opened 6% lower on the MCX, but the weakness intensified, leading to a 9% drop. Within minutes of the market opening, the price fell by ₹24,196, reaching ₹2,44,654 per kilogram. This decline in silver prices also had a strong impact on silver ETFs, which fell by 13-15%.
The pressure on Indian silver prices stemmed from the global market, which is currently experiencing significant turmoil. Global silver prices witnessed a sharp decline within minutes this morning, falling from over $90 per ounce to below $75 per ounce in early trading in the Asia-Pacific region.
Silver prices had shown a tremendous rally until recently, and just a few days ago, they crossed the ₹4 lakh mark on MCX for the first time. However, prices then crashed last week and fell sharply. Today’s decline wiped out all the gains of the previous two days. Before today’s fall, it had shown a good rally from the oversold zone in the preceding two days. It is currently among the most leveraged assets on the MTF (Margin Trading Facility) book. According to data as of February 4th, the Nippon AMC Silver ETF had leveraged positions exceeding ₹1300 crore.
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