Silver prices in India experienced significant declines on Friday, with MCX Silver rate falling 1% or over ₹2,300 to ₹2,39,200 per kg, while MCX Gold price lost 0.4% or over ₹600 to ₹2,41,513 per 10 grams. According to latest reports from LiveMint, this decline comes amid continued weakness across the precious metals pack as Brent crude prices have jumped over 17% this week to above $105 per barrel, with the key Strait of Hormuz still largely closed despite an extension of the Iran ceasefire. In global markets, spot silver fell 0.3% to $75.22 per ounce, while spot gold edged down 0.1% to $4,686.29 per ounce as of 0230 GMT and is down 3% so far this week, snapping a four-week winning streak. The latest decline is attributed to profit booking after the US dollar climbed 0.7% this week, making bullion more expensive for other currency holders, while benchmark 10-year U.S. Treasury yields have risen over 2%, increasing the opportunity cost of holding non-yielding metals.
The primary trigger behind the precious metals decline is the sharp rise in crude oil prices, with Brent crude remaining above $105 per barrel following larger-than-expected draws in gasoline and distillate inventories in the United States. As reported by LiveMint, higher crude prices tend to push up transportation and production costs, which feeds into broader inflation. This, in turn, reduces the likelihood of near-term interest rate cuts, creating a negative environment for non-yielding assets like silver. Iran showcased tighter control over the strait, releasing visuals of commandos boarding a cargo ship following the collapse of U.S.-Iran peace talks, with Donald Trump saying Tehran may want a deal but added the U.S. is in no hurry and could act militarily if needed. The latest developments show fresh tensions between the US and Iran contributing to the rebound in crude oil prices and subsequent pressure on precious metals.
Market expectations for U.S. monetary policy have shifted significantly, with a Reuters poll showing the U.S. Federal Reserve is likely to delay interest rate cuts for at least six months as energy-driven inflation risks persist. According to LiveMint, traders now price in only a 23% chance of a 25-basis-point rate cut in December, down from 28% a week earlier. Before the escalation in conflict, markets had anticipated two rate cuts this year. The combination of rising oil prices, delayed rate cut expectations, and ongoing geopolitical tensions is weighing on silver, even as broader uncertainty remains elevated.
Market experts are advising caution amid the current volatility, with The Economic Times reporting that both gold and silver are witnessing sharp price swings. Manoj Kumar Jain of Prithvi Finmart expects silver to hold its key support at $64 per troy ounce, while gold is likely to sustain above $4,550 per troy ounce on a weekly closing basis. He added that prices of both precious metals are likely to remain volatile this week due to fluctuations in the dollar index, movement in crude oil prices, and uncertainty around the US-Iran peace deal. For gold, support is seen in the range of $4,720 to $4,681 per troy ounce, with resistance placed between $4,785 and $4,818. Silver has support at $76.00 to $74.00, while resistance is pegged at $79.80 to $81.40 per troy ounce for the day. On the MCX, gold is supported at ₹1,51,500 to ₹1,50,650 and faces resistance at ₹1,53,650 to ₹1,54,700, while silver has support in the range of ₹2,45,500 to ₹2,42,000 and resistance is seen at ₹2,51,200 to ₹2,54,800. Jain advised investors to book profits in existing long positions in gold and silver and wait for corrective dips before initiating fresh long trades.
