Hindustan Zinc shares surged over 3% on January 12 as silver prices rebounded strongly after a sharp decline earlier in the week. The company, which is India's largest silver producer, saw its stock price rise to ₹625.00 per share during early trading hours as investors responded positively to the precious metal's rally.

Silver Futures Reach Record Highs

Silver futures demonstrated exceptional strength across all contract periods on the Multi Commodity Exchange of India (MCX):

Spot silver prices reached a fresh lifetime high of $83.96 per ounce, reflecting strong global demand for the precious metal.

Silver ETFs Mirror Price Surge

Silver exchange-traded funds experienced significant gains, closely tracking the underlying commodity's performance. Multiple silver ETFs recorded gains of approximately 4%:

• Zerodha Silver ETF: +4.00%
• UTI Silver ETF, DSP Silver ETF, Axis Silver ETF: ~4.00% each
• ICICI Pru Silver ETF, Nippon Silver ETF: ~4.00% each
• Motilal Oswal Silver ETF, SBI Silver ETF: ~4.00% each
• Mirae Asset Silver ETF, Tata Silver ETF, HDFC Silver ETF: ~4.00% each

These ETFs have delivered returns of up to 176% over the past year as silver prices experienced significant appreciation.

Hindustan Zinc Stock Performance

Despite the recent surge, Hindustan Zinc shares had declined more than 3% over the previous five days due to profit-booking in silver prices. However, the company's longer-term performance remains strong:

Market Drivers and Outlook

Geopolitical tensions and potential tariff policies are supporting safe-haven demand for precious metals. US President Donald Trump is considering imposing tariffs as high as 500% on countries purchasing Russian oil, which could escalate trade tensions and further boost demand for gold and silver.

According to Kaynat Chainwala, AVP Commodity Research at Kotak Securities, these developments could pressure major buyers like China, India, and Brazil to halt purchases of discounted Russian crude, potentially escalating US-China trade tensions and supporting safe-haven demand.

However, Ross Maxwell, Global Strategy Operations Lead at VT Markets, advised caution regarding the sustainability of current price levels. He noted that while industrial demand from green technologies supports long-term fundamentals, short-term rallies often attract rapid inflows that can reverse quickly, leading to potential sharp pullbacks.

Hindustan Zinc Ltd has exhibited a bearish reversal pattern on its 4-hour chart, signaling potential near-term downward momentum after experiencing a prolonged uptrend in recent trading sessions.

Double Top Pattern Formation

The stock has formed a double top pattern in the 4-hour timeframe, which represents a classic bearish reversal signal. This pattern is characterized by two peaks formed at roughly the same price level, separated by a moderate pullback, suggesting that buying pressure is weakening.

On Thursday, the stock broke below the ₹605.00 support neckline after completing the double top formation. This breakdown, accompanied by increased selling volumes, confirms near-term bearish momentum and signals a potential shift from uptrend to downtrend.

Technical Indicator Analysis

Multiple technical indicators are confirming the bearish momentum across different timeframes:

RSI Analysis: The daily RSI shows clear bearish momentum, dropping significantly from 70 in the previous trading session to 52.60 on Thursday, confirming the continuation of the downtrend.

MACD Signals: The orange signal line has crossed above the blue MACD line, with the histogram turning red, indicating strengthening bearish momentum.

Moving Average Breakdown: On the 4-hour timeframe, the 5-day moving average has crossed below the 9-day moving average, providing additional confirmation of the bearish trend.

Price Targets and Resistance Levels

The downside target for the double top pattern is calculated by measuring the distance between the peak level and the neckline, then projecting that distance downward from the breakdown point. On the upside, resistance is likely around ₹605.00, while sustained trading below the breakdown zone would signal continued bearish pressure.

Company Background

Hindustan Zinc Ltd, a Vedanta Group company, stands as the world's largest integrated zinc producer and ranks among the top five silver producers globally. The company exports to over 40 countries and commands approximately 77% share of India's primary zinc market.

Despite the recent bearish technical formation, the stock has delivered strong performance over longer timeframes, with notable gains across monthly, semi-annual, and annual periods.