Today silver prices suffered a remarkable collapse. In this one trading session, they fell anywhere between 25% and 30%. But just twenty-four hours after the white metal climbed to record heights, the "liquidity wipeout" suddenly entered the market's circuits of both retail and institutional investors.
The "Warsh" Washout: What Set Off the Crash?
The trigger for this unprecedented volatility was both a combination of geopolitical shifts and technical "froth." The prime driving force was President Donald Trump's nomination of Kevin Warsh as the next Chair of the Federal Reserve. Warsh, a known hawk on currency stability and Fed independence, soon caused a massive “re-pricing” in the global market:
The Dollar Spike
The US Dollar Index (DXY) leapt up sharply, making dollar-denominated silver expensive for global buyers.
- Margin Calls: The Chicago Mercantile Exchange (CME) raised margin requirements for silver from 11% to 15%, forcing highly leveraged traders to liquidate their positions immediately.
- Stop-Loss Cascades: As prices fell below the psychologically critical $100 an ounce mark, automatic sell orders (stop-losses) were triggered, creating a "waterfall" effect.
City-Wise Impact In India
With the same violence in India, the crash was not. On the MCX, silver futures for March delivery recorded their largest daily drop ever, falling by more than ₹67,000 per kg.
| City | Rate Today (Jan 31, 2026) | Change from Peak |
| Delhi | ₹3,84,500 | ↓ ₹1,25,000+ |
| Mumbai | ₹3,94,900 | ↓ ₹1,20,000+ |
| Chennai | ₹4,04,900 | ↓ ₹1,15,000+ |
| Bengaluru | ₹3,95,000 | ↓ ₹1,20,000+ |
Investor Guide: Strategy for Aftermath
For silver holders or buyers entering the market, the "blood on the streets" scenario calls for disciplined action.
Before Exit: Share Buy or Sell
The crash notwithstanding, silver finished January up 19% as of Jan end. Silver structural bull analysis continues to hold, according to analysts at Motilal Oswal and Goldman Sachs, backed on industrial demand in solar energy, EVs, and AI data centers. This marks a technical correction for an 'overbought' market; it is not a collapse in underlying assets or values in the market.
It is good news for some new buyers. Although it is easy to "buy the dip," the market is still catching its breath. Experts advise;
- Staggered Entry: Do not put your eggs in one basket. Waiting for the market to stabilise between ₹3,50,000 -₹3,65,000.
- Concentrate on physical: Retail premiums tend to keep high in paper-market crashes. If you’re purchasing physical coins or bars, try to make sure there’s no ‘panic premium’ paying to the local jewelers.
Watch the Budget
With the Union Budget 2026 due to begin on 1 February, any change in gold or silver import duties could set off a second major price swing. It might make sense to wait until Monday’s fiscal announcements before big moves.
