Silver in bear market grip already, but only if you are invested in ETFs. Time to sell?

Here’s a market riddle: How can silver be in a bear market – and not in one – at the same time? Ask ETF investors nursing 25% losses while MCX traders are down just 13%. It’s a brutal divergence that reads like a tale of two silvers.

Silver ETFs, which had doubled investor wealth in 2025 as recently as last week, have now plunged into bear market territory – down about 25% from their October 15 peak, when their NAVs were trading at hefty premiums to underlying asset prices. The funds slipped 4–5% in morning trade and were still down around 2% by afternoon.

Yet the physical market tells a different story. MCX silver December futures are down only about 13% from their peak of Rs 1,70,415 and were trading nearly 2% higher at Rs 1,48,385. In international markets, silver extended its decline to $48.31 per ounce after falling 7.6% over the past two sessions.

The premium that once inflated ETF NAVs has now vanished, leaving investors who chased the rally at record highs nursing deeper losses than those trading futures or holding physical silver.

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The meltdown comes just days after a historic squeeze in the London silver market pushed prices past the record set in 1980 during the infamous Hunt brothers’ cornering attempt. Benchmark spot rates had surged above New York futures, triggering shipments of physical metal to London to ease the shortage. But as the rally overstretched technical indicators, the white metal’s ascent faltered – with macro jitters and a resurgent greenback pulling the rug from under prices.
“Gold nearly hit $4,400 and silver touched $54, almost $55. Like any market, it needed a washout because it had simply overgrown itself,” said market strategist Peter McGuire. “It became too expensive, and there was that inflection point where it just blew off hot air — not unusual in raging bull markets where you see some form of correction.”
However, McGuire remains bullish on the long-term outlook. “In the longer term, rates appear to be heading lower. We’re likely to see another run-up in gold, and I wouldn’t be surprised if it breaks $5,000 in the coming months. For silver, $65 is probably the level to watch,” he added.
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Investors have almost fully priced in a 25-basis-point rate cut at the Federal Reserve’s meeting next week. Gold typically benefits from lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.

“Gold and silver prices stabilized around $4,050 and $48 per ounce after a sharp correction in the past two sessions, as investors booked profits from Monday’s record highs,” said Rahul Kalantri, VP–Commodities at Mehta Equities. “The pullback reflected a shift toward risk assets amid optimism over US–India trade relations, weakening gold’s safe-haven appeal. Seasonal demand in India also eased, putting additional pressure on the physical market.”

Meanwhile, the geopolitical backdrop remains volatile. US President Donald Trump said on Wednesday he expects to reach a trade agreement with Chinese President Xi Jinping and plans to raise concerns over China’s purchases of Russian oil during their meeting in South Korea next week. Trump also imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting oil majors Lukoil and Rosneft.

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Meanwhile, the Trump administration is considering measures to curb a wide range of software-powered exports to China, from laptops to jet engines, in response to Beijing’s latest round of rare earth export restrictions.

Investors are now awaiting Friday’s US CPI report for fresh insights into the Fed’s policy outlook.

Rahul Kalantri sees silver support at $47.85–47.40, with resistance at $48.75–49.30. In INR terms, silver has support at Rs 1,44,350–1,43,450 and resistance at Rs 1,46,850–1,47,780.

According to Motilal Oswal, prices may consolidate in the $50–55 per ounce range in the near term but could rise toward $75 by 2026 and $77 by 2027 on COMEX — levels that translate to around ₹2.4 lakh per kg domestically, assuming a USD–INR rate of 90. Bank of America remains bullish as well, raising its silver target to $65 per ounce, even while forecasting an 11% demand decline next year due to ongoing structural supply shortfalls.