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Informist, Tuesday, Dec. 30, 2025

 

MUMBAI – Silver prices are expected to rise next year, supported by growing expectations of interest rate cuts by the US Federal Reserve and increasing safe-haven demand driven by geopolitical uncertainties, analysts said. This comes after the most-active March silver contract on the COMEX fell over 8% Monday after hitting a record high of $82.31 per ounce earlier in the day. The market closed at $70.46 per ounce Monday.

 

Futures contracts of silver on the COMEX fell over 8.4% due to profit-taking after hitting record highs, analysts said. "Investors rushed to lock in profits as silver had hit multiple record highs this year, and traders wanted to secure gains before the end of the year," Manoj Jain, director, Prithvi Finmart, said.

 

The other major reason for the fall in prices was the easing of geopolitical tensions between Russia and Ukraine, Jain said. After holding talks with Ukrainian President Volodymyr Zelenskiy on Sunday, US President Donald Trump said they were "getting a lot closer, maybe very close" to an agreement to end the war in Ukraine. Both leaders reported progress on two of the most contentious issues in peace talks –- security guarantees for Ukraine, and the division of eastern Ukraine's Donbas region that Russia sought to capture. 

 

Market sentiment was also hurt Monday after the Chicago Mercantile Exchange on Friday increased margin requirements for gold, silver, and other metals, according to a release on the exchange website. This meant traders would need to deposit more cash on their bets in order to insure against the possibility that the trader would default in taking delivery of the contract. "Additional pressure came after CME Group raised margin requirements for white metal futures by $3,000 for the March 2026 contract, taking margins to about $25,000, in an effort to curb excessive speculative activity following recent sharp rallies," Kedia Advisory said in a note. "Despite the correction, silver remains on track for an exceptional gain of nearly 180% in 2025, underpinned by speculative inflows, lingering supply disruptions after the October short squeeze, central-bank buying, strong ETF (exchange-traded fund) inflows, and expectations of further US monetary easing in 2026."

 

"In the long term, silver prices are seen rising, as investors are expecting two rate cuts by the US Federal Reserve in 2026 and increasing safe-haven demand driven by geopolitical uncertainties," Kedia Advisory said. Typically, a lower interest-rate environment boosts the appeal of non-interest-yielding precious metals. Further, Russia on Monday accused Ukraine of launching a drone attack on the presidential residence in northern Russia, due to which Moscow now plans to review its position in peace talks. Ukraine dismissed Russian statements about the attack and its foreign minister said Moscow was seeking "false justifications" for further strikes. This has again put peace talks on the back burner, fuelling geopolitical tensions.
 

At 1229 IST, the most-active March silver contract on the MCX was up nearly 6% at INR 236,250 per kilogram, and the March silver contract on the COMEX was up 6% at $74.63 per ounce.  End

 

US$1 = INR 89.78

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Reshma Ravi

Edited by Tanima Banerjee

 

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