Silver prices remained steady on Tuesday amid escalating US-Iran tensions, with MCX silver holding at ₹2,43,927 per kg in India while international spot silver rose 0.1% to $72.76 per ounce. The precious metal is currently caught between competing forces—geopolitical risk offering support, and a relatively firm interest rate outlook limiting upside. MCX gold rate was also muted, up 0.4% at ₹1,49,950 per 10 grams, reflecting the cautious market sentiment. Other precious metals also saw mild gains, with platinum rising 0.5% to $1,954.80 and palladium advancing 0.8% to $1,491.84.
The key driver remains escalating tensions between the US and Iran, particularly around the strategically critical Strait of Hormuz. Fresh military action has rattled markets, with both sides engaging in naval and aerial confrontations, raising concerns over global oil supply disruptions and broader economic uncertainty. Reports indicated that US forces destroyed multiple Iranian vessels and intercepted missiles and drones, while Iran attempted to disrupt shipping routes. The situation has kept safe-haven demand for precious metals like silver intact, though not strong enough to trigger a sharp rally. Crude oil prices showed volatility, with US crude slipping over 1% as markets assessed the real impact of the conflict alongside reports of continued shipping activity through the strait under military protection.
On the monetary policy front, commentary from New York Federal Reserve President John Williams suggested that current policy settings are adequate to navigate uncertainty. He indicated that once inflation pressures ease, the central bank could shift focus back toward rate cuts. However, political pressure continues to build, with US President Donald Trump reiterating his call for lower interest rates, creating a divergence between policy stance and political messaging that has added another layer of uncertainty for bullion markets. This has limited silver's upside potential despite the geopolitical support.
Gold, often a directional cue for silver, also edged 0.2% higher to $4,528.99 per ounce after falling more than 2% in the previous session to its lowest level since March-end. US gold futures for June delivery were also marginally higher at $4,538.20, indicating a stabilisation in broader bullion sentiment. The recovery comes after silver prices had witnessed a strong recovery on Saturday, May 2, with silver prices in India standing at ₹265 per gram and ₹2,65,000 per kilogram, representing a sharp jump of ₹10,000 per kg after a rise of ₹5,000 per kg on Friday. This recovery came after silver futures had crashed by ₹3,917 to ₹2.47 lakh per kilogram on the Multi Commodity Exchange (MCX) in the previous session.
Prithviraj Kothari, MD at RiddiSiddhi Bullions Ltd. and President of India Bullion and Jewellers Association Ltd., explained that gold and silver slipped to one-month lows amid stalled US-Iran talks and the Strait of Hormuz closure, which has severed roughly 20% of global oil supply - the largest supply shock on record per the IEA. He noted that rising energy costs, a stronger dollar, and firm inflation expectations are compounding headwinds for precious metals. Chainani highlighted that jewellery demand fell to a record low in the first quarter due to affordability pressures, while bar and coin investment offered partial support with resilient retail interest. On the industrial front, strong earnings from global technology firms supported long-term demand for silver in electronics and data infrastructure.
The current price movement reflects broader market concerns about elevated crude oil rates amid inflation concerns that are dampening investor sentiment. As reported by The Economic Times, the decline comes despite structural support from physical demand and central bank buying, with market participants closely watching developments around geopolitical hotspots and monetary policy changes that could impact precious metals demand. Looking ahead, silver is currently caught between competing forces—geopolitical risk offering support, and a relatively firm interest rate outlook limiting upside. Until there is more clarity on either front, prices are likely to remain range-bound with a mild upward bias, with the precious metal showing steady performance near ₹2.44 lakh/kg amid ongoing market volatility.
