Silver Price Declines Amid Strengthened US Dollar, Brent Crude Surpasses $100 Amid US-Iran Tensions

Precious Metals Report: March 9, 2024

Key Highlights

• MCX Silver rate fell 1.4% to ₹2,64,475 per kg, while MCX Gold rate fell 1.1% to ₹1,59,826 per 10 gram.
• International markets saw declines in precious metals, with Spot Silver dropping 2.2% to $82.50 per ounce and Spot Gold slipping 1.7% to $5,082.51 per ounce.

Market Analysis

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The decline in bullion prices is attributed to a strengthening U.S. Dollar, which raised the cost of precious metals for investors holding other currencies. Additionally, U.S. Treasury yields moved higher, increasing the opportunity cost of holding non-yielding assets such as gold. The rise in crude oil prices, driven by growing concerns over the Strait of Hormuz, also contributed to the downturn in precious metals.

Global Market Trends

• Spot Platinum dropped 2.8% to $2,076.07, while Palladium fell 1.2% to $1,605.12.
• U.S. Gold futures for April delivery fell 1.4% to $5,099.40.
• Crude oil prices surged more than 20% to above $110 per barrel.

Monetary Policy Expectations

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• The CME Group's FedWatch tool shows investors expect the U.S. Federal Reserve to hold interest rates steady at the conclusion of its two-day policy meeting on March 18.
• Market pricing also shows rising expectations that the Fed may delay rate cuts, with the probability of keeping rates unchanged in June increasing to more than 51%.