Silver prices declined on Thursday amid renewed uncertainty over US-Iran negotiations, with spot silver trading at ₹2.71 lakh per kg, down ₹2,291 or 0.83% according to CNBC TV18. At the time of writing, silver was trading at ₹2.71 lakh per kg, down 0.7% for the day, as reported by Business Standard. In the week ending May 15, silver declined by 5% to $75.99, with the white metal giving back its intra-day gains as oil prices spiked higher. The precious metal faced pressure from speculations about Federal Reserve policy tightening due to increased inflationary risks, with MCX silver continuing to trade in the red and underperforming gold. Spot gold prices, following a rally of 1.5% on Iran deal hopes on Wednesday, slumped on Thursday as oil erased its losses following reports that Iran intends to keep its uranium, as reported by Business Standard.
The ongoing uncertainty over Middle East conflict continues to cap gains in silver prices, with Iran intending to keep its uranium, which has always been a key sticking issue in the US-Iran negotiations, as reported by Reuters. On May 21, Tehran said that the latest proposal from Washington had partly bridged the gap between the two sides, which was negated by the news that Iran plans to keep its uranium. Reuters reported on May 21 that Iran's Supreme Leader Mojtaba Khamenei had issued a directive that the country's near-weapons-grade uranium should not be sent abroad. US President Trump responded by saying the US can take Iran's uranium and destroy it, adding that the Strait of Hormuz should remain free of tolls. Iran is discussing with Oman how to set up a permanent toll system that will formalise its control of maritime traffic through Hormuz. Gold's trajectory continues to depend on oil prices as traders remain fixated on rate moves. High oil prices are supporting the US Dollar and increasing the probability of rate hikes, according to Business Standard.
Silver ETF holdings have witnessed a dramatic decline as investors dumped their positions amid the Iran conflict. As of May 20, total known silver ETF holdings stood at 794.80 MOz, down by 8.56% year-to-date, with ETF holdings seeing a net outflow of 37.2 MOz since the beginning of the Iran war. COMEX's registered silver inventory at 81.67 MOz is down by 60% from the record peak of 201 MOz seen in September 2025, as reported by Business Standard. The analyst noted that geopolitical uncertainty and movement in crude oil remain the key drivers for bullion sentiment, with gold expected to trade within a range of ₹1,57,250–₹1,59,500 for the near term. Gold ETF holdings have shrunk by 2.2 MOz since the start of the year as the possibility of rate cuts fizzled out due to high oil prices, with total known global gold ETF holdings standing at 98.72 MOz, down by 0.23 MOz year-to-date.
Markets are pricing in the possibility of tighter US monetary policy later this year, with markets assigning an 86% probability of a rate hike by year-end, as traders see a 100% chance of a rate hike in February 2027, according to Business Standard. CME Group's FedWatch tool showing traders currently see a 39% probability of a 25 basis-point rate hike in December. According to CNBC TV18, minutes from the US Federal Reserve's April meeting showed that a majority of policymakers believed additional policy tightening may become necessary if inflation remains above the central bank's 2% target. Two-year US yields, which are more sensitive to the Fed's monetary policy compared to long-term yields, stood at 4.10%, up 1% for the day, with earlier yields rising to 4.14%, the highest since February 2025. Gold prices have fallen more than 14% since the Iran conflict escalated in late February, as elevated oil prices intensified inflation concerns and reinforced expectations that interest rates could remain higher for longer. Higher Treasury yields increase the opportunity cost of holding bullion, which typically performs better in a lower interest rate environment.
In the retail market, gold is available in 24-karat and 22-karat purity, with 24-karat gold being the purest form and 22-karat commonly used for jewellery. As reported by Mint, Mumbai gold prices show 24-karat at ₹1,60,250 per 10 grams and 22-karat at ₹1,46,896 per 10 grams, while silver 999 fine is priced at ₹2,72,810 per kg. Other major cities including Delhi, Bengaluru, Kolkata, Hyderabad, and Chennai also reported similar price ranges with minimal variations. India has imposed fresh restrictions on imports of most silver products to support the weakening rupee, with several silver product categories shifted from the "free" to the "restricted" import category under a May 16 notification. Shanghai Gold Exchange silver is trading around $84/Oz, at a premium of nearly 10% to the LBMA spot price, with silver stock at the Shanghai Futures Exchange standing at 989 tons, the lowest in a decade.
