Hindustan Zinc shares drop 2% as silver prices fall by Rs 8,000/kg, silver ETFs at day's low

Silver prices fall

• Hindustan Zinc shares drop 2% as silver prices fall post-rally
• Silver futures dropped up to 3 percent, erasing earlier lifetime highs
• Silver ETFs mirrored the fall, with some erasing sharp intraday gains

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The shares of Hindustan Zinc fell nearly 2 percent on January 7 as silver prices tumbled after a sharp rally. Silver ETFs also dropped, mirroring the intraday fall in the precious and industrial metal.

Hindustan Zinc shares fell to Rs 632.60 apiece on Wednesday. The company is the largest producer of silver in India, and produces refined silver with a minimum 99.9 percent purity.

Silver prices:

Silver futures with March expiry on the Multi Commodity Exchange of India (MCX) fell nearly 3 percent to Rs 2,51,729 per kilogram. This comes after the contracts hit fresh lifetime high of Rs 2,59,692 per kg earlier during the day.

Futures with May expiry fell 2.5 percent to Rs 2,58,566 per kilogram, also erasing earlier gains after hitting fresh lifetime high. The future contracts with July expiry meanwhile fell over 2 percent to Rs 2,65,028 per kilogram. The futures have fallen around Rs 8,000 per kilogram each from their lifetime highs which they had hit earlier during the day.

Spot silver lost 3.5 percent to $78.43 per ounce, down from an all-time high of $83.62 hit on December 29.

The sharp fall may have been driven by profit booking, while a stronger dollar weighed on sentiment across precious metals ahead of key U.S. jobs data due this week.

Silver ETFs:

Silver exchange traded funds (ETFs) mirrored the fall in silver prices. 360 ONE Silver ETF fell 2 percent, while Axis Silver ETF, Tata Silver ETF, SBI Silver ETF and HDFC Silver ETF were trading in the green with marginal gains, erasing earlier sharp rise during the day.

Nippon India Silver ETF, UTI Silver ETF, ICICI Prudential Silver ETF, Motilal Oswal Silver ETF, Zerodha Silver ETF and others rose more than 0.5 percent, also erasing earlier day gains.

Hindustan Zinc share price:

Hindustan Zinc shares gained nearly 3 percent in the past five days, and over 29 percent in the past one month. The stock jumped 45 percent in the past six months.

What should investors do?

Silver shows higher volatility than gold showing a bubble-like behavior, Aggarwal from VSRK Capital said. "Strategy entry can be planned when prices stabilise near support zones with market sentiment improving but consider that metals tend to remain choppy for years after a strong rally," he added.

Looking ahead to 2026, the medium-term outlook remains constructive, especially for silver, Harshal Dasani, Business Head, INVasset PMS said, adding that the structural industrial demand linked to electronics, solar and electrification remains strong, while supply constraints have persisted for several years, keeping the market in deficit.

"Silver, in particular, had become a momentum trade in 2025, rising sharply over the year, which made it vulnerable to profit-booking and leveraged unwinds once sentiment turned. Gold, too, delivered outsized gains over the past year, so even routine corrections appear severe when they follow such a strong run," Dasani said.

In the near term, price direction will continue to be influenced by the US dollar and real interest rates—any repricing toward higher yields tends to pressure non-yielding assets like gold and silver, while softer yields and risk aversion restore their appeal, according to the analyst.

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