Transcription
The video is purely educational and not financial advice. Trading involves financial risk. Past performance is no guarantee of profits. Please consult a SEBI registered financial advisor before making any investment decisions.
Hello friends, I am Praveen Khaitan. Welcome to today's next episode. We will discuss silver. A heavy fall has been seen in silver. Silver has dropped by approximately 15%. On MCX futures, it has fallen from ₹170 or ₹71,000 to ₹145,000. In Delhi's bullion market, silver is currently around ₹171,000, and it had hit a high of approximately ₹2 lakh in the bullion market. All the news channels were saying, "It will go to ₹2.5 lakh, ₹3 lakh, buy silver, buy silver." So what happened to silver suddenly? Why did it fall so much? Okay?
I had previously warned about silver and made a detailed video on silver. If you haven't seen it, I uploaded it around October 1st or 2nd. Please do watch it. I am also providing the link in the description.
Okay, so the question now arises: what next? Will we see further decline in silver? If we have to short silver, from where should we do it? And can we get trapped in silver? What are the important levels? What will be our support, target, resistance? We will discuss all these things today. So, you need to watch carefully. What will be the future of silver? You will be able to tell if you watch this video carefully. We will discuss technical charts, some fundamental data, and international demand and supply. So, what will be the outlook in 2025? We will understand this from international demand and supply as well. But first, let's understand what the chart says.
This is the silver chart, in which the fall we have seen from the top is currently 14.75%, which is around 15%. So, what is the expectation? And will it fall further from here? Will it go down from ₹1,45,000? Let's understand this.
Now, something noteworthy here is that you will see the RSI peak was around 84 points, and now it is around 50. But if you look at the weekly chart, the RSI is still above 70, and a crossover has just occurred. Right? So, what could be the target if the price falls further? Or will it be a deception for all of you? You will short here, and the price will rally.
Let's understand this. If we measure the fall in silver according to Fibonacci levels, our drawing will be from this level. Why? I explained this in the previous video. So, understand carefully. If you haven't seen it, watch that video. According to this, we have already crossed the 23.6% level in Fibonacci. And our next target is around ₹38,138,000, at the 38.2% Fibonacci retracement level. The strongest support, considered as the lowest, is 61.8% of Fibonacci, which means if the price continues to fall, this will be a level you need to remember, around ₹118,000. There is a high expectation for the price to stabilize at this level as per Fibonacci. So, remember two levels, two numbers: around ₹138,000-300 and the level of ₹18,000-69,290. We have taken this level as per Fibonacci on a daily chart.
Now, if we talk about the weekly chart, let's move to the weekly chart. On the weekly chart, our RSI is currently around 75. And if we assume that it can stabilize after 50% RSI, just like we saw a fall here, approximately a 50% RSI fall. So, if we consider a 50% RSI fall, then from our current price, if it falls further, we could see a fall of at least 20,000 to 25,000 points, which is approximately around ₹1200. I am telling you this as an RSI correction, that the RSI will cool down to 50, and we could see a target of around ₹1200. Right. So, this was as per Fibonacci.
Now, let's do some trend analysis. I am keeping both these lines for you, the support and the important levels. Okay? So, if we talk about the trend, we understood in the last episode that we made the video around October 10th, and after that, we saw the price moving upwards. And we had said that if our 81-degree trend line breaks, then we can short sell it. So, the price continuously went up. The trend line of around 81 degrees broke out here. After that, we saw the price moving downwards. So, that was one of the best use cases of a trend line.
Anyway, if we look recently, our trend is forming something like this. So, if we talk about the long-term trend, let's come to the long term a bit. So, we have this recently, and some other trends are also there. Our shallow trend is something like this. So, this was increasing from around 2022, which is a very stable growth rate of silver. So, if we say that our first diagonal support will be somewhere here, around the ₹1300 level, which you need to note. We are talking about stability, that this will act as support. The price might increase a bit from here, stabilize a bit. If it breaks, then the next level we will see is this. After that, we will see this level.
Now, our third important level, the long-term trajectory, is something like this. That means this is a level which will be around 1 lakh or around ₹98,000. Silver can follow this level, meaning after the fall, it will stabilize here and follow its long-term trajectory. So, you should also watch this third level. And it comes to around the ₹1 lakh level. You should watch this. Okay?
So, these are the scenarios in case of a fall. What is the chance that silver will deceive everyone and go up from here and act as support? If silver goes up from here, deceiving everyone. Firstly, if we talk about Fibonacci retracement, deception should not happen from here. We should get deception at least around ₹13,38,000. Okay? So, first, this is the point. But let's assume. A price has a nature. Keep that in mind for any price. Price retests its levels. Retesting means this is our high. Okay? So, it will try to test this high again, and if it fails, our price will fall.
So, if we talk about the fair value gap here, we are seeing a very nice fair value gap here. So, this is a retesting area. The expectation is that if the price goes down, then it's a different story. If it goes up, this level will be retested by the price, filling this fair value gap, and then we can see a further decline in the price. So, that's quite possible in case if the price goes up. Because it is the nature of the price to retest.
In this situation, our trade can be formed in such a way that when the price comes below this fair value gap, we will short, and we can trade with a stop loss above it. The second option is, in case our price breaks from here. Let's assume our price breaks from here. Then this level will be our significant level for a shift. Meaning, our stop loss will be around ₹144,900. A stop loss of around ₹4000 or above. Which means, in terms of percentage, it is around a 3% stop loss, which is a very big stop loss. If we go for intraday, another stop loss will emerge. So, if this level breaks, especially the current price, then we can see a slide from here.
But I will repeatedly say that with the fair value gaps we have, if this price slides from here, understand carefully. If this price slides from here, it will still go up, retest the price, and then it will come down. So, in that scenario, in that possible scenario, we will have this thing as a fair value gap. Here will come some reason which the price will hit and then come down. So, this is there.
What is the guarantee that the price will fall? It's not like the price will only go up. Now, look, as per my experience, my 15 years of experience in the stock market, actively and passively. I have been investing since 2005, but actively since around 2009, after my MBA, I have been active in the market. Now, we have here the World Silver Survey of 2025, published by the Silver Institute, and the data is very credible. So, if you see the long-term outlook book of silver, from 2021 to 2025, there has been a deficit of approximately 25,000 tons. That is, in supply, mining, and production, and demand, there is a deficit of approximately 5,000 tons every year.
It is also noteworthy that there has been a significant surge in demand in PV installations between 2021 and 2025, and also in BEV and hybrid production. But the demand for light-duty vehicles is still stable, flat. Okay, some more interesting data. This is the most important summary of supply and demand. So, this is the 2025 report, meaning data up to 2024 and forecast for 2025. So, if we look here up to 2024, there was a 2% increase in world supply. No doubt, there is a shortage in many major mines. But it is being fulfilled from somewhere. Mine production increased by 1%. Recycling had a 6% growth in 2023-24, and the forecast for 2025 is lower. Similarly, if we talk about demand, our demand increased by 4% in 2024. Electricals also increased by 4%. It increased by 3%. It increased by 3%. It increased by 4%. It increased by 3%. There was a 22% decrease in coins and net bars. And net hedging demand saw a 62% decrease in 2024. So, overall, the total demand in the market saw a 3% decrease, and a 1% decrease is being talked about for 2025.
So, now it remains to be seen that there is not much significant change in demand and supply. So, even if mining is not able to fulfill the demand as per its requirement, a four-fold increase in price is somehow not rational and not very logical. So, hold your breath. You will get silver at a fair price soon.
Friends, I have seen many families get ruined in 2011, and I have given the complete chart analysis in the previous video. Please do watch it. I am providing the link in the description. I also have the 2011 chart saved. And you will not find it on TradingView, trust me, not that old. It ends after 2016. I have that too. I shared it with you in that video.
So, my experience says that at that time too, a lot of hype was created. I will tell you what people were saying: there was an earthquake in Japan, and due to supply disruption, silver prices increased. Brother, Japan does not contribute that much to silver production. First of all, Mexico has the highest production in the world, and India is in the fourth position. Hindustan Zinc produces a good amount of silver. Anyway, so at that time, they were giving that reason for Japan. Now, it happened in India, so the reason is different: EVs use a lot of silver. EVs use very little compared to copper, lithium, and other products like cobalt. So, XYZ news spread that there is a lot of this. Because of this, our silver prices are increasing. So, demand is very high, supply is very short, and all the mines in the international market are finishing. To some extent, the points are correct, but they are exaggerated.
Now, I am sorry. What problem arose that silver prices quadrupled? That is, from 32,000 to 70,000, then from 70,000 to 1 lakh 400, then 2 lakh. What is this? How much more silver did we start eating, drinking, and wearing that the prices have increased so much? Right? There are many metals in the world that are rare. They are very limited. But that doesn't mean their prices will increase fivefold. Naturally, when hype is created, big investors take advantage of it. They buy cheap, ride the hype, and then sell at the top, and the common man is left thinking.
See, the same thing happened in 2011. When silver started rising from 32,000-33,000, by 50,000, everyone started investing in it. All the TV channels started saying that silver prices will go to ₹1.5 lakh, and buy silver, buy silver. Everyone was buying. And I remember people bought silver at ₹5,000, ₹5,500, ₹6,000, ₹6,500. My relatives also bought. And at a point around ₹68,800-300, I got them to exit. But still, some people bought, and there was a lot of trading on margin. People were working a lot on credit. And then when it fell, no one got a chance to recover. That is, from 70,000-72,000, I guess to 68,000, and then around 58,000, and then the next day around 42,000, 52,000, 49,000, and then after a few days, 42,000, and it went down. People were rolling over futures contracts for three years and were never able to recover their money. And it took around 10 years to come back to that level, the peak of 2011. After 14 years, silver has reached that peak. In dollar terms, it has become $170 because of dollar depreciation. But if you look at the dollar rate in the international market, it is around $40-50 per ounce, which was the rate in 2011. So, it took 14 years to reach that level. Are you understanding? 14 years, meaning our demand increased like this.
Now, what suddenly happened in the market that in one to one and a half years, the rate quadrupled? Therefore, in such hype situations, let the price stabilize a bit. If you want to buy silver to keep at home for weddings, jewelry, or any purpose, then wait a bit. If you are trading in futures on MCX, then actively watch these levels, the important levels, and trade thoughtfully only on bounces from levels or breakouts of levels.
So friends, if you liked this video, don't forget to share it with your friends because knowledge increases by sharing. And do like this video and subscribe because your small like and subscription give me a lot of love and a lot of motivation to keep making videos. See you in the next video. Until then, bye-bye, take care.