Metal stocks experienced their third consecutive session of decline, falling 4.62% on Thursday, with NALCO emerging as the biggest loser at 4.38%, followed by Hindustan Zinc down 4% and Vedanta declining 3.27%. According to reports from Moneycontrol, these declines occurred as the Nifty Metal index dipped 1% to an intra-day low of 12,496, while the NSE Nifty 50 index was up 0.6% or 153 points at 24,175. The metal sector underperformed significantly, reflecting broader concerns about global economic growth and commodity market pressures.
Silver prices crashed by 7% overnight to $57.70 levels, extending losses for a third straight session on Thursday, as reported by Business Standard. The precious metal has more-than-halved when compared with its peak of $121.78 registered in late January 2026. This dramatic decline comes after silver tumbled to a seven-month low in the previous session, highlighting the severity of the current market correction. Precious metals remained under pressure from a stronger US dollar, which climbed to a one-year high near 101.5, and growing expectations of Federal Reserve rate hikes in September, according to Pinky Yadav, Commodity Fundamental Analyst at Choice Broking. As per Kitco NewsWire, spot gold and silver prices were sharply lower after the close on Wednesday, as a firmer U.S. dollar, post-Fed rate repricing, and easing oil-supply fears outweighed residual haven demand tied to the U.S.-Iran situation.
The decline in metal stocks came amid sharp falls in base metal prices on the London Metal Exchange (LME), driven by easing supply concerns, a stronger US dollar and expectations of an interest rate hike by the US Federal Reserve. According to Informist, silver settled 2% lower at $3,421.50 per tonne, while aluminium closed more than 3% lower at $3,122.50 per tonne on Wednesday. Zinc and copper also ended about 2% lower at $3,421.50 per tonne and $13,086.50 per tonne, respectively. As per Axis Securities, aluminium prices retreated to pre-Iran conflict levels as a firmer US dollar and the continued unwinding of the Middle East risk premium outweighed concerns surrounding lingering disagreements between Washington and Tehran over key terms of a potential peace agreement.
The sharp decline in metal prices comes amid increasing expectations of a hawkish Federal Reserve, as reported by Business Standard. The US Federal Reserve last week held interest rates unchanged, but a higher number of policymakers expected a rate hike in borrowing costs later this year amid concerns about inflation remaining above the US central bank's 2% target. In what was the first Fed FOMC meeting under Chairman Kevin Warsh's tenure, the central bank acknowledged that inflation was 'elevated relative to the Committee's 2% goal', partly due to 'supply shocks that have driven price increases in certain sectors, including energy'. According to Kitco NewsWire, the post-Fed rate repricing has contributed to the current precious metals selloff.
Nitant Darekar, Research Analyst at Bonanza, noted that "Metal stocks are underperforming rather than crashing today. A sell-off in precious metals, especially silver, on a stronger US dollar and a hawkish Fed stance has triggered selling in the space." He considers this as healthy consolidation in an intact uptrend, not a structural breakdown, emphasizing that commodity-price direction remains the key swing factor. The Nifty Metal index has underperformed in June, declining 7% thus far this month while the Nifty rose 2.5%, as reported by Business Standard. Despite the 7% fall, the Nifty Metal index continues to hold a smart 12% gain for the calendar year 2026, while the Nifty has shed 7% in the same period.
