The Indian bullion market has just witnessed one of its most historic and volatile weeks. If you’ve been tracking MCX Silver prices, you know that the “Budget 2026 correction” wasn’t just a minor dip—it was a seismic shift. After silver skyrocketed to an eye-watering record high of ₹4.20 lakh per kg in late January, the market underwent a brutal “reality check” that saw prices plummeting toward the ₹2.65 lakh mark.
For the average Indian investor, this 35-40% correction feels like a rollercoaster ride. Is this the end of the silver rally, or is the white metal just “taking a breather” before a fresh surge? Let’s dive deep into the MCX silver price forecast after the Budget 2026 correction.
The Great Correction: Why Silver Crashed 40% Around Budget 2026
The crash wasn’t caused by a single event but a “perfect storm” of global and domestic triggers. On February 1, 2026, while Finance Minister Nirmala Sitharaman presented the Union Budget, MCX silver was already hitting lower circuits.
1. The “Kevin Warsh” Effect & The Strong Dollar
Globally, the nomination of Kevin Warsh as the new US Federal Reserve Chair acted as a massive headwind. Known for his hawkish stance on inflation, his appointment signaled that the Fed might be less aggressive with rate cuts than previously expected. This sent the US Dollar Index (DXY) surging, which almost always exerts downward pressure on precious metals.
2. Budget 2026: The Duty Cut Speculation
Heading into the budget, the market was rife with rumors of a significant cut in import duties. While the FM eventually announced a reduction in customs duty on gold and silver to 5%, the anticipation led to massive “sell-the-news” profit-booking.
3. Technical Blow-off Top
As a commodity expert recently noted, silver’s move to ₹4 lakh was a “blow-off top”—a parabolic rise where prices run far ahead of fundamentals. When such a bubble bursts, the correction is often vertical and painful.
MCX Silver Price Forecast 2026: Post-Budget Outlook
With the dust beginning to settle, where is the floor for silver? Most analysts suggest that while the short-term trend is “bearish-to-cautious,” the long-term structural story remains intact.
Short-Term Support and Resistance (Q1 – Q2 2026)
Technical indicators have shifted significantly. The steep bullish channel has been broken, and the market is now in a “sell-on-rise” mode.
| Level Type | Price Target (MCX Silver) | Analysis |
|---|---|---|
| Critical Support | ₹2,55,000 – ₹2,60,000 | This is a major demand zone. If this holds, we could see a base formation. |
| Immediate Resistance | ₹3,00,000 – ₹3,10,000 | Any recovery toward this level is likely to face heavy selling pressure. |
| Optimistic Target | ₹3,50,000 | Possible by late 2026 if industrial demand offsets monetary headwinds. |
Key Drivers That Will Shape Silver Prices in 2026
Silver is a unique asset—half precious metal, half industrial commodity. Here is what you need to watch:
1. The Green Energy Revolution
Silver is indispensable for solar panels, EV components, and 5G infrastructure. Even as the “monetary” premium (safe-haven demand) cools, the “industrial” demand remains in a structural deficit. Experts predict 2026 will be the sixth consecutive year of silver market deficits.
2. The Silver-to-Gold Ratio
Historically, when silver crashes harder than gold (as it did this February), the ratio widens. If gold stabilizes around ₹1.45 lakh per 10g, silver eventually looks “undervalued” at current levels, attracting value investors.
3. RBI Monetary Policy
The upcoming RBI policy meet will be crucial for the USD/INR pair. A stable or stronger Rupee could further soften domestic silver prices, making it more affordable for retail buyers.
Expert Tips for Indian Investors: Should You Buy the Dip?
Investing in silver requires a stomach for volatility. Here is how professional traders are approaching this correction:
- Avoid Lumpsum Bets: The market hasn’t confirmed a bottom yet. If you have ₹1 lakh to invest, consider doing it in 4-5 tranches over the next three months.
- Watch the ₹2.45L Level: Some aggressive bears, like Jigar Trivedi of IndusInd Securities, predict a slide toward ₹2.45 lakh. Keeping some “dry powder” for those levels could be wise.
- Focus on Silver ETFs: For those worried about physical storage and purity, Silver ETFs offer better liquidity, though they did face sharp circuit limits during the crash.
“The recent correction is a healthy reset. It cleared out excessive leverage from the system. For long-term players, silver remains a strategic asset for the green-tech era.” — Bullion Market Insight
Summary of Key Stats (February 2026)
- All-Time High: ₹4,20,934 (Jan 29, 2026)
- Post-Budget Low: ₹2,65,652 (Feb 1, 2026)
- Net Correction: ~37% in 4 days.
- Revised Customs Duty: Reduced to 5%.
Disclaimer: Commodity trading involves high risk. This article is for informational purposes and does not constitute financial advice. Please consult a SEBI-registered advisor before investing.
