Silver crashes Rs 5,000 ahead of Dhanteras: Is rally over, should you buy now?

Silver prices fell nearly 3% on Tuesday, November 3, shedding more than Rs 5,000 per kg on the Multi Commodity Exchange (MCX), just days before Dhanteras. The sharp decline has raised questions about whether the metal's spectacular rally is losing steam and whether the latest correction offers an opportunity for buyers.At around 11.50 am, MCX silver futures were trading at Rs 1,78,624 per kg, down Rs 5,155, or 2.80%. Dhanteras, when many households traditionally buy gold and silver, falls on November 6 this year. The latest fall comes after a sharp correction in silver prices, making the festive buying decision more complicated for consumers and investors.But does the fall mean silver's rally is over? And should buyers use the dip to add the metal to their portfolios? WHY IS SILVER FALLING?Kaynat Chainwala, AVP – Commodity Research, said the recent weakness in silver is largely due to macroeconomic pressures and broad market deleveraging, rather than a deterioration in its long-term fundamentals.Elevated oil prices, firm US economic data and persistent inflation concerns have strengthened expectations that interest rates could remain higher for longer. This has supported real yields and reduced the appeal of non-yielding assets such as precious metals. Silver has also faced pressure from weakness in technology stocks. The metal has significant industrial exposure to sectors such as semiconductors, artificial intelligence infrastructure, consumer electronics and solar manufacturing.Chainwala said silver has underperformed gold in recent weeks, with the gold-to-silver ratio rising above 79, its highest level in nearly a year. This reflects investors' preference for gold amid heightened uncertainty.The international market has also seen pressure on precious metals. Spot silver fell 1.8% to $49.71 an ounce on Tuesday, while spot gold declined 0.5%, according to Reuters.IS SILVER'S RALLY OVER?The recent correction does not necessarily mean that silver's long-term rally has ended, according to Chainwala.She said the structural demand outlook remains intact, supported by global investment in solar energy, power-grid expansion, electrification and electric vehicles.“Therefore, the recent decline is more consistent with a cyclical reset than a change in the underlying demand narrative,” she said.However, investors should not assume that silver has found a durable bottom. Chainwala identified the $47-$50 per ounce region as an important support zone in the international market.A sustained break below $47 could expose silver to a deeper correction towards $43-$45 per ounce, particularly if elevated energy prices keep inflation expectations and bond yields under pressure or concerns over AI-related capital spending weigh on technology-linked sectors.On the other hand, a moderation in oil prices, easing bond yields, renewed confidence in technology investment or expectations of a less restrictive monetary policy could help silver recover over the coming quarters.SHOULD YOU BUY SILVER NOW?Chainwala believes the correction has made silver more attractive for long-term investors, but cautioned against trying to identify the exact bottom.She favours a staggered accumulation approach, in which investors build exposure gradually rather than investing a large amount at one price.Investors with a three-to-five-year horizon and conviction in themes such as electrification, renewable energy and infrastructure investment could use periods of weakness to incrementally add silver exposure, she said.However, silver is more volatile than gold and can see sharper price swings during both corrections and recoveries. This means investors should be prepared for further downside in the near term.Chainwala also pointed to the nearly 20% monthly correction and the gold-to-silver ratio above 79 as signs that a significant amount of pessimism may already be reflected in prices.GOLD OR SILVER: WHICH IS A BETTER BUY?Silver may offer stronger upside participation when industrial demand and investment appetite improve, but it also carries higher short-term volatility.Gold, meanwhile, continues to offer a relatively more defensive option during periods of economic and market uncertainty.Chainwala said gold should remain the core precious-metals allocation, with silver serving as a higher-beta complement for investors willing to take on greater volatility in pursuit of potentially stronger long-term returns.This means silver may suit investors looking for exposure to industrial growth themes and willing to tolerate price swings. Gold may be more appropriate for those prioritising stability and diversification.Neither metal should be treated as a guaranteed short-term bet, particularly when prices are moving sharply.WHAT DID GOLD AND SILVER COST LAST DHANTERAS?The latest prices are significantly higher than the levels seen during Dhanteras last year, despite the recent correction.On October 18, 2025, MCX gold was around Rs 1,27,320 per 10 grams, while silver was at Rs 1,57,300 per kg, according to data reported by Moneycontrol.MetalDhanteras 2025November 3, 2026Gold (per 10 grams)Rs 1,27,320Around Rs 1,40,200Silver (per kg)Rs 1,57,300Around Rs 1,78,600The current gold figure is based on MCX December futures data available on November 3, while the silver figure is based on the December futures contract at around 11.50 am. Last year's figures are the MCX rates reported on Dhanteras. These are indicative market comparisons, not retail jewellery prices.The comparison shows that both metals are trading above their Dhanteras levels of 2025. Silver's latest correction has not erased its gains over the year.For buyers heading into Dhanteras, the decision may ultimately depend on their investment horizon and ability to withstand volatility. Silver's long-term demand story remains supported by industrial uses, but the near-term outlook is uncertain. Gold, meanwhile, continues to offer a relatively steadier precious-metals allocation.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends