Silver prices in India have witnessed an extraordinary surge of approximately ₹1 lakh per kg within a single month, propelling prices beyond the ₹3 lakh per kg milestone. This dramatic price movement has created significant shifts in market dynamics, affecting both physical demand patterns and investor behavior across different segments of the silver market.

Price Performance and Market Outlook

The domestic silver market has experienced unprecedented price levels, with current rates exceeding ₹3 lakh per kg. International markets reflect similar strength, with silver trading around $93-94 per ounce. Kishore Runwal, CEO of Anmol Silver, anticipates further price appreciation, projecting silver prices could reach ₹3.30 lakh per kg.

Physical Demand Dynamics

The sharp price rally has created contrasting demand patterns across different markets. Physical silver currently trades at a discount in Indian domestic markets, while commanding premiums in international markets. In China, silver sells at a premium of approximately ₹10,000, highlighting regional price disparities.

Investor participation in India has become limited due to elevated price levels. The high prices have particularly impacted the silver articles segment, where demand has declined noticeably. Runwal noted that while turnover levels remain similar due to higher prices, actual volumes have fallen significantly.

Segment-wise Performance

Different silver market segments are responding variably to the price surge:

• Silver Articles: Sales have slowed considerably with declining volumes
• Silver Jewellery: Demand remains relatively stable despite price increases
• ETF Investments: Have shown increased activity and stronger performance
• Physical Trading: Currently at discount levels in domestic markets

Import Trends and Trade Patterns

Despite the substantial price increases, India's silver imports have maintained robust levels, remaining close to the previous year's import volumes. This contrasts sharply with gold imports, which have experienced a decline during the same period. The sustained import levels suggest continued underlying demand despite the cooling physical market conditions.

The current market scenario reflects the complex interplay between price movements and demand dynamics in India's precious metals sector, with silver's dramatic price appreciation creating both opportunities and challenges across different market segments.

Domestic gold rates surged to unprecedented levels on Monday, with February futures hitting a fresh lifetime high of ₹1,45,500 per 10 grams on the MCX. The rally was driven by global price momentum following US President Donald Trump's fresh tariff threats against European nations over his planned Greenland acquisition.

Market Performance and Global Impact

The precious metal demonstrated strong bullish momentum across markets on Monday:

The surge came after Trump announced plans to impose rising tariffs from February 1 on goods imported from several European nations. The targeted countries include EU members Denmark, Sweden, France, Germany, Netherlands, and Finland, along with Britain and Norway. These measures are intended to pressure these nations until the US is allowed to purchase Greenland.

Geopolitical Tensions Escalate

Trump's Saturday announcement marked a significant escalation in trade tensions, with major EU states describing the move as blackmail. The threat comes after a previously negotiated trade deal and has reignited market concerns about global trade stability.

European Union ambassadors responded on Sunday by reaching broad agreement to intensify efforts to dissuade Trump from implementing the tariffs. According to Reuters reports citing EU diplomats, the bloc is also preparing a package of retaliatory measures should the duties proceed as planned.

Technical Analysis and Market Outlook

Jateen Trivedi, Vice President - Research at LKP Securities, noted that gold begins the week on a firm note with the broader trend remaining firmly bullish. However, he emphasized that elevated price levels suggest buying on intraday or positional dips remains the preferred strategy rather than chasing upside momentum.

Key Technical Levels

Technical Indicators Analysis

The technical picture remains constructive across multiple indicators:

• RSI (14): Currently at 69, reflecting strong momentum while staying below extreme overbought levels
• Bollinger Bands: Price trading near upper band, confirming trend strength with moderately expanded bands
• Moving Averages: EMA 8 providing dynamic support around ₹1,42,500-₹1,43,000, with EMA 21 near ₹1,39,000-₹1,40,000
• MACD: Remains in positive territory with histogram above zero, indicating intact bullish momentum

Currency Impact and Trading Strategy

Trivedi highlighted that persistent rupee volatility is keeping MCX gold relatively more volatile compared to COMEX. Any renewed weakness in the Indian rupee is likely to cushion downside risks and support domestic gold prices even during global consolidation phases.

For trading strategy, experts suggest a buy-on-dip approach with the following parameters:

The bullish structure is expected to remain intact as long as prices hold above the ₹1,40,000 level on a closing basis, with the positive slope of key moving averages reinforcing the continuation of the uptrend.