Hindustan Zinc shares slide as silver rally fizzles out after sharp intraday correction
Shares of Hindustan Zinc came under pressure on January 7, slipping nearly 2 percent after silver prices witnessed a sudden and steep intraday fall. The decline in the metal followed a strong rally earlier in the session, which had pushed silver futures to fresh lifetime highs before profit-taking set in.
The stock fell to around ₹632.60 per share during the session, reflecting investor caution as silver—an important revenue contributor for the company—lost momentum. Hindustan Zinc is India’s largest producer of silver, refining the metal at a purity level of at least 99.9 percent, making movements in silver prices particularly significant for its valuation.
Silver prices retreat sharply on MCX after hitting record highs
Silver futures on the Multi Commodity Exchange of India (MCX) dropped by nearly ₹8,000 per kilogram within hours of touching record levels. The sudden reversal highlighted the high volatility currently seen in precious metals.
Key movements in silver prices included:
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March expiry silver futures fell nearly 3 percent to about ₹2,51,729 per kg after hitting a lifetime high of ₹2,59,692 earlier in the day.
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May expiry contracts declined around 2.5 percent to ₹2,58,566 per kg, also erasing earlier gains.
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July expiry futures slipped over 2 percent to approximately ₹2,65,028 per kg.
In the international market, spot silver fell 3.5 percent to $78.43 per ounce, down sharply from its all-time high of $83.62 recorded in late December.
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Profit booking and strong dollar weigh on silver sentiment
Market participants attributed the sharp fall in silver prices largely to profit booking after the recent rally. A firmer US dollar ahead of key US jobs data also added pressure, as stronger dollar levels tend to make commodities more expensive for global buyers.
An analyst tracking the metals market explained, “After such a rapid rise, even a small trigger can lead to aggressive unwinding. Silver’s volatility remains much higher than gold, and that makes intraday moves particularly sharp.”
Silver ETFs mirror the intraday fall in underlying metal prices
Silver exchange-traded funds (ETFs) reflected the volatility seen in the physical and futures markets. Several silver ETFs erased early gains and traded near the day’s lows as prices corrected.
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Some silver ETFs declined by up to 2 percent during the session.
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Others managed marginal gains of around 0.5 percent but still gave up most of their intraday rise.
The movement underlined how closely ETF performance tracks spot and futures prices, especially during periods of heightened volatility.
Hindustan Zinc share price still strong despite short-term correction
Despite the day’s decline, Hindustan Zinc shares have delivered strong returns in recent weeks. The stock has:
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Gained nearly 3 percent over the past five trading sessions
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Rallied over 29 percent in the last one month
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Jumped around 45 percent in the past six months
This strong performance suggests that the recent dip is being viewed by many investors as a reaction to short-term commodity price movements rather than a change in the company’s fundamentals.
Experts caution investors as silver shows bubble-like behaviour
Market experts are urging caution, pointing out that silver tends to be more volatile than gold, particularly after sharp rallies. According to analysts, the recent surge had made silver vulnerable to sudden corrections.
Aggarwal from VSRK Capital noted, “Silver shows higher volatility than gold, often displaying bubble-like behaviour. Entry strategies should be planned only when prices stabilise near key support zones. Metals can remain choppy for years after a strong rally.”
Medium-term outlook for silver remains constructive, say analysts
While near-term volatility may persist, some experts remain optimistic about silver’s medium-term prospects. Harshal Dasani, Business Head at INVasset PMS, believes structural demand continues to support the metal.
“Looking ahead to 2026, the medium-term outlook for silver remains constructive. Industrial demand from electronics, solar energy and electrification is structurally strong, while supply constraints have kept the market in deficit for several years,” Dasani said.
He added that silver had become a momentum-driven trade in 2025, making it vulnerable to profit booking once sentiment shifted. Even routine corrections, he explained, can appear severe after an extended rally.
What should investors do amid silver and stock market volatility?
In the near term, analysts believe price direction for silver—and stocks like Hindustan Zinc—will remain closely linked to global macro factors.
Key points for investors to watch include:
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Movements in the US dollar and real interest rates
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Signals from upcoming US economic data
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Stability in silver prices after recent highs
Experts advise long-term investors to avoid reacting to short-term price swings and instead focus on fundamentals, demand trends and disciplined entry points.
As one analyst summed up, “Corrections are part of any commodity cycle. Investors should look beyond daily volatility and align their strategy with long-term demand and supply dynamics.”
