The meteoric rise in the price of silver ended last week. In five days of trading that ended Friday, the metal plunged around 26% to Rs 53,200 per kg from Rs 72,000 per kg on April 30, following a global trend.
Speculators dumped long positions after the New York Mercantile Exchange (Nymex), the world's largest physical commodity futures exchange, hiked margins requirement several times in the week.
"Speculators liquidated their long position due to hike in margins by Nymex, fall in prices of crude oil and some stability in world politics," said Alex Mathew, research head, Geojit Bnp Paribas Financial Services.
In the short term silver is expected to see more selling pressure. "However in the long run the price will again rise as demand will grow," said Mathew.