Precious Metals Report

Market Overview

On March 11, the silver rate declined 1% to its day's low of ₹2,75,000 per kg on the Multi Commodity Exchange (MCX), while MCX gold price fell 0.30% to ₹1,62,800 per 10 grams. In the spot market, spot silver edged 0.1% lower to $88.35 per ounce, while spot gold rose 0.3% to $5,208.08 per ounce as of 02:43 GMT.

Market Drivers

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The decline in silver prices was driven by easing oil prices, which dropped below $90 per barrel, cooling some inflation concerns in global markets. Additionally, the US dollar slipped as much as 0.1%, further shaping the outlook for precious metals.

Geopolitical Situation

The ongoing war in the Middle East continues to disrupt crude production and refining operations, with the conflict entering its 12th day. The International Energy Agency has proposed the largest-ever release of oil from strategic reserves to counter supply disruptions.

Interest Rate Expectations

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Investors are closely watching upcoming US inflation data for further cues on interest rates. The US consumer price index (CPI) for February is due later in the day, while the Personal Consumption Expenditures (PCE) index is scheduled for release on Friday. According to CME Group's FedWatch tool, investors widely expect the US Federal Reserve to keep interest rates unchanged at the end of its two-day policy meeting on March 18.

Investment Strategy

Tata Mutual Fund recommends that investors consider accumulating precious metals during price corrections, given the supportive long-term fundamentals and macroeconomic uncertainties. The fund house suggests adopting a staggered approach when investing in silver, considering its inherently volatile nature.