Silver Price Drops 2.5% Amid Rising Brent Crude Oil Prices and Strengthening US Dollar

Global Markets Plummet as Silver and Gold Prices Decline Sharply

On Monday, April 13, the global market witnessed a sharp decline in silver and gold prices, weighed down by a stronger dollar and a surge in oil prices following the failure of U.S.-Iran peace talks. This development has raised concerns about persistent inflation, which may delay Federal Reserve rate cuts this year.

The decline in precious metals was evident on the Multi Commodity Exchange (MCX), where silver price fell by 2.5% to ₹2,37,190 per kg. Gold price also lost 0.8% to ₹1,51,457 per 10 grams. Similarly, spot silver fell by 2.2% to $74.23 per ounce, reflecting a broad weakness across precious metals.

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The primary trigger behind the decline in precious metals is the strengthening of the dollar by 0.4%, which adds pressure to precious metals. A stronger dollar makes dollar-denominated metals more expensive for other currency holders, dampening demand. Silver is also facing additional pressure due to its industrial nature, as rising energy costs and prolonged geopolitical tensions raise concerns about slower global growth.

The sharp jump in oil prices, which climbed to around $104 per barrel after the U.S. Navy prepared a blockade of the Strait of Hormuz following failed U.S.-Iran talks, has fuelled inflation worries. This, in turn, is reshaping interest rate expectations, with traders now seeing little chance of a U.S. Federal Reserve rate cut this year. Higher-for-longer interest rates reduce the appeal of non-yielding assets like silver. While inflation typically supports safe-haven demand for precious metals, the current environment of elevated interest rates is offsetting that benefit.