Silver prices experienced a dramatic surge on Friday, with MCX silver futures rallying ₹9,764 per kilogram to hit the day's high of ₹2,54,220, extending its winning streak to the second straight session. According to LiveMint, the rally has turned the white metal's weekly return positive at 2.50% so far, with silver recovering nearly ₹22,000 from Tuesday's low. In overseas markets, Comex silver futures gained $3.52 to $77.52 per ounce, helping cut its weekly loss to 0.50% after losing nearly 7% in the previous week. The rally was supported by fresh optimism for an Iran deal, with Iran reportedly delivering a new proposal for negotiations with the United States to Pakistani mediators, as reported by IRNA state-run news agency. The fate of the key Strait of Hormuz lies at the heart of the stalemate, with both Iran and the US signalling they are waiting for the other side to move first before agreeing to ease restrictions.
The rally gained momentum following the U.S. Federal Reserve's decision to maintain interest rates unchanged for the third straight meeting, with the central bank keeping the target range for the federal funds rate at 3-1/2 to 3-3/4 per cent. As reported by The Hindu BusinessLine, Umesh Sharma, CIO-Debt at The Wealth Company, noted that the Federal Open Market Committee delivered a widely expected hawkish pause, keeping the policy rate unchanged while reinforcing its inflation-first stance. The decision suggests policymakers remain concerned over stalled disinflation and upside risks arising from factors such as energy prices. Adding another layer of uncertainty, Jerome Powell announced he will step down as Chair at the end of his term but continue as a Fed Governor, signalling continuity during the transition. The European Central Bank and the Bank of England also left interest rates unchanged on Thursday, following similar decisions by the Federal Reserve and the Bank of Japan this week.
A major development emerged as Iran reportedly delivered a new proposal for negotiations with the United States to Pakistani mediators, according to IRNA state-run news agency. The standoff between the two countries is impacting global energy prices, with Brent crude earlier this week rising to a four-year high and oil prices now touching nearly double the levels seen at the start of the year. However, Iran has earlier submitted multiple proposals to the US as well, but Donald Trump has rejected them, maintaining that the Islamic Republic must first agree to a nuclear deal that satisfies the White House's key demands. Trump reaffirmed that the US would maintain its naval blockade of Iranian ports to intensify economic pressure, with the standoff continuing to affect global energy markets and inflation concerns.
While silver rallied strongly, MCX gold futures rose ₹1,097 to reclaim the ₹1.52 lakh mark at ₹1,52,208, recovering from this week's low of ₹1,47,950 with a solid recovery of ₹4,258. In overseas markets, Comex gold futures rallied $44 per troy ounce to an intraday high of $4,673, yet the yellow metal remained on track for its second weekly loss. U.S. gold futures for June delivery climbed 0.4% to $4,578.50, while other precious metals also saw gains with platinum rising 1.7% to $1,911 and palladium advancing 0.9% to $1,470.40. The higher energy prices have started reflecting in inflation numbers, with US inflation accelerating in March 2026 and the headline PCE price index hitting 3.5% annually, its highest level in nearly three years. Policymakers have revised inflation estimates higher, pushing back expectations of rate cuts and encouraging central banks to keep interest rates higher for longer.
The near-term outlook for precious metals remains a balancing act between supportive factors like fresh Iran peace hopes and safe-haven demand, and headwinds such as elevated oil prices and a potentially prolonged high-interest-rate environment. While bullion prices have fallen since the start of the Iran conflict in late February, the metal is traditionally considered a hedge against geopolitical uncertainty. The dramatic rally to ₹2.54 lakh per kg represents a significant bounce from recent lows, though sustained price levels will depend on continued progress in Iran negotiations and resolution of geopolitical tensions affecting oil markets. The Federal Reserve's hawkish pause, while widely expected, has provided precious metals with renewed support amid ongoing global uncertainties, though rising energy prices could encourage central banks to keep interest rates higher for longer, pressuring non-yielding assets like gold as investors turn to alternatives.
