Hindustan Zinc shares tumble 5% as silver price drops below Rs 2.5 lakh/kg, silver ETFs fall 3%

Hindustan Zinc share price

• Hindustan Zinc shares fell nearly 5 percent as silver prices tumbled sharply
• Silver ETFs dropped over 3 percent, mirroring the decline in silver prices
• Analysts say silver remains volatile but medium-term outlook is constructive

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The shares of Hindustan Zinc tumbled on January 7 as silver prices extended decline, falling up to Rs 4,000 per kilogram within an hour. Silver ETFs also dropped, mirroring the fall in the precious and industrial metal.

Hindustan Zinc shares dropped nearly 5 percent to a near three-week low of Rs 599.25 apiece, extending decline for the second consecutive session. The company is the largest producer of silver in India, and produces refined silver with a minimum 99.9 percent purity.

Silver prices tumble:

Silver futures with March expiry on the Multi Commodity Exchange of India (MCX) fell more than Rs 3,000 to Rs 2,47,529 per kilogram. This comes after the contracts hit fresh lifetime high of Rs 2,59,692 per kg earlier yesterday.

Futures with May expiry fell more than Rs 3,300 to Rs 2,54,876 per kilogram. The future contracts with July expiry meanwhile fell over Rs 4,000 to Rs 2,62,399 per kilogram.

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. Edelweiss Silver ETF, HDFC Silver ETF, UTI Silver ETF, Axis Silver ETF, Zerodha Silver ETF, Groww Silver ETF, Tata Silver ETF, SBI Silver ETF, DSP Silver ETF, Aditya Birla Silver ETF, Mirae Asset Silver ETF, Nippon Silver ETF and ICICI Prudential Silver ETF were down more than 3 percent each.

Kotak Silver ETD, Motilal Oswal Silver ETF and 360 ONE Silver ETF meanwhile fell nearly 3 percent each, extending sharp decline for the second consecutive session.

Hindustan Zinc share price:

Hindustan Zinc shares fell more than 3 percent in the past five days, but gained 22 percent in the past one month. The stock jumped 37 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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