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Informist, Wednesday, Jan. 28, 2026

 

MUMBAI – The silver market is experiencing one of the most volatile sessions in recent history, underlining how quickly a commodity boom can transition into commodity mania, Kedia Advisory said in a note Wednesday. Illustrating the volatility, the most-active March silver contract prices on the COMEX opened near $104 per ounce, surged sharply to a lifetime high of $117.73, and then fell to an intraday low of $101.98. This extent of volatility is not supported by fundamentals, Kedia Advisory said.

 

"A nearly $16 swing within a single trading day is highly unusual for a precious metal and reflects a market increasingly driven by sentiment and positioning, rather than incremental changes in fundamentals," Kedia Advisory said.

 

Silver's broader advance remains underpinned by solid structural fundamentals. Growth in global mine supply is limited by a lack of new investment and declining ore quality, while industrial demand from solar power, electronics, electric vehicles, and energy infrastructure continues to expand steadily. However, the note pointed out that the recent surge in prices has unfolded much faster than underlying fundamentals typically evolve. This rapid move has drawn in aggressive speculative activity, particularly in futures markets, driving prices into overextended conditions and heightening the risk of sharp pullbacks.

 

"Historically, commodity cycles often evolve from fundamental-driven rallies into mania-driven price action, where volatility surges, and price corrections become disproportionately large. Silver's recent price behaviour reflects this transition, where belief and momentum temporarily overshadow balance and valuation. In this phase, both upside and downside risks rise sharply, making aggressive positioning increasingly dangerous," it said.

 

Current market action suggests silver has entered a mania-like phase, marked by extreme volatility and the potential for abrupt and severe pullbacks. Although the longer-term fundamental outlook remains supportive, short-term positioning on either side of the market now involves heightened risk. "Investors are advised to remain cautious, reduce leverage, and avoid chasing price moves. In commodity manias, rallies can be spectacular, but corrections often arrive faster and deeper than expected. Discipline and risk management, rather than conviction alone, are now critical in navigating the silver market," Kedia Advisory said.

 

Recognising the risk factor, the government Tuesday raised the base import price of silver by $595 to $3,545 per kg, according to a notification issued by the Central Board of Indirect Taxes and Customs. India is one of the world's biggest importers of silver.

 

At 1057 IST, the most-active March silver contract on the MCX was up 7% at INR 381,903 per kg, after hitting a record high of INR 383,100 per kg earlier Wednesday. The most-active March contract on COMEX was up 9% at $115.93 per ounce.  End

 

US$1 = INR 91.71

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

 

Reported by Reshma Ravi

Edited by Nishant Maher

 

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