Silver price outlook: Silver prices extended their decline on Tuesday, with MCX silver falling more than 2% as a stronger US dollar and uncertainty over the Federal Reserve's interest rate outlook weighed on precious metals. The white metal dropped by around ₹4,200 to ₹1,91,516 per kg, while international spot silver declined 2.1% to $52.77 per ounce.
The sharp correction has raised questions about how much further silver prices could fall in the near term. However, analysts believe that the metal's longer-term prospects could remain supported by industrial demand, particularly from the artificial intelligence (AI) infrastructure sector, and persistent supply deficits.
They believes silver could eventually reach around ₹2.84 lakh per kg in the second half of 2027, even as prices face near-term turbulence.
The recent sell-off in precious metals has been driven by concerns that rising crude oil prices could keep inflation elevated and prompt the US Federal Reserve to maintain a restrictive monetary policy for longer.
The US dollar remained near a two-week high on Tuesday, reducing the appeal of dollar-denominated bullion for overseas buyers. Investors are awaiting the Federal Reserve's policy decision on October 28 and the US Personal Consumption Expenditures (PCE) inflation data, scheduled for October 29. The PCE index is the central bank's preferred inflation gauge.