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Silver prices cooled slightly on Thursday after hitting record highs, as traders booked profits amid weak global cues. On the MCX, silver futures for March 2026 slipped Rs 751, or 0.36 per cent, to Rs 2,06,684 per kg.

Earlier this week, silver had touched fresh all-time highs on strong investment demand. On Wednesday, prices jumped Rs 10,078, or 5.10%, to a record Rs 2,07,833 per kg on the MCX.

Speaking to Zee Business, IBJA President Prithviraj Kothari said the rally in silver is backed by supply and demand factors, though prices have moved up sharply in a short span.

Kothari said silver has been in short supply for the last two to three years. “LBMA London warehouses are short of silver and supply remains tight,” he said. He added that the current rally is not being driven by physical demand.

“This year, silver is seeing only investment demand. Physical demand is weak, and silver is trading at a discount in China, Hong Kong, Dubai and even in India,” Kothari noted.

Highlighting the rise in trading activity, Kothari said global volumes in silver have increased sharply. “In China, trading volumes are extremely high. One single day’s volume was around 26,000 tonnes, which is close to annual production,” he said.

He added that open interest has not increased significantly, suggesting that the move is driven more by heavy trading than fresh hedging.

According to Kothari, strong returns have encouraged investors to increase exposure to silver. “People are adding silver to their portfolios due to the returns it has delivered,” he said.

He also pointed to rising consumption from sectors such as electric vehicles and solar panels, which is supporting long-term demand, while ETF demand remains strong.

Despite the strong momentum, Kothari cautioned that silver is overheated in the short term. “Silver is in an extremely overbought territory, and a correction is needed,” he said, adding that some correction could be seen ahead of the holiday season.

According to him, silver could offer better value around $55 levels, which translates to Rs 1.70–1.80 lakh per kg in rupee terms.

On the long-term outlook, Kothari remains positive. “In the long term, silver moving towards $80–90 is not a big surprise,” he said.

He advised investors not to rush into profit booking unless there is a genuine need for funds. “If there is no need for money, it is not right to sell and wait to buy again,” he added.