MCX silver futures have been hammered over the past four trading sessions, with prices crashing Rs 35,300 after the Centre raised import duty on gold and silver to 15% from 9%. In Monday’s session alone, MCX silver futures for July 2026 delivery slumped Rs 5,643, or 2.1%, to Rs 2,65,949 per kg.The selloff marks a dramatic reversal for the white metal, which had surged to a record high of Rs 4.39 lakh in January. In just four months, silver prices have corrected nearly 40%, bringing the metal down to around Rs 2.65 lakh.What’s behind the recent downfall?The sharp decline reflects a combination of demand destruction, macroeconomic worries and changing investor sentiment. Unlike gold, silver derives a substantial portion of its demand from industrial applications, making it far more sensitive to shifts in global growth expectations. The metal is widely used in solar panels, semiconductors, batteries, electronics, electric vehicles, AI infrastructure and green energy systems.“At the same time, geopolitical tensions linked to the Iran conflict initially triggered safe-haven buying across precious metals. However, markets later began to focus on the potential impact of prolonged elevated oil prices on global growth momentum. That concern tends to affect industrial metals more heavily than pure defensive assets, causing silver to increasingly trade like an industrial commodity rather than a traditional safe-haven hedge,” Ponmudi R said.The increase in import duty is also expected to weigh on domestic consumption. India remains the world’s largest silver importer, and the higher duty could push local prices even higher, potentially hurting jewellery demand and slowing industrial imports.According to Nirpendra Yadav of Bonanza, the increase in import duty to 15% materially raises local prices and could dampen demand across segments. He added that if the Iran conflict keeps crude oil prices elevated for an extended period, central banks may continue maintaining a hawkish stance due to inflation risks. Higher interest rates generally hurt precious metals because non-yielding assets become less attractive compared with interest-bearing investments.Time to buy the dip?From a technical standpoint, analysts believe silver’s recent vertical rally is now showing signs of exhaustion.MCX silver opened with a sharp gap-down and is currently holding above the Rs 2,73,000 mark. Immediate resistance is seen in the Rs 2,76,000-Rs 2,77,000 zone. A sustained move above these levels could help prices stabilise and potentially trigger a recovery toward Rs 2,81,000-Rs 2,83,000. On the downside, a breach below Rs 2,71,000 may drag prices back into the earlier consolidation band of Rs 2,68,000-Rs 2,67,000. For now, the near-term outlook remains cautious and heavily dependent on safe-haven demand amid ongoing geopolitical uncertainty.Earlier this month, Tata Mutual Fund said in a report that the weakening global economic outlook could restrict silver demand over the medium term. The fund house noted that slower solar installations and unwinding of large long positions have eased supply tightness in international markets.At the same time, the report maintained that silver continues to be a compelling long-term structural story, supported by rising demand from AI infrastructure, green energy expansion, solar capacity additions, electronics manufacturing and electric vehicles. However, given the metal’s sharp volatility, Tata Mutual Fund recommended a staggered investment approach for medium- to long-term investors.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)