Silver Price Falls 1% on MCX to ₹2.72 Lakh per Kilogram Amid Firm Dollar and High Crude Oil Prices

Silver Prices Decline Sharply Amid Geopolitical Tensions and Stronger US Dollar

Silver prices plummeted on Tuesday, weighed down by a stronger US dollar and escalating tensions in the Middle East. Fresh US military strikes in Iran pushed crude oil prices higher, intensifying concerns over inflation and the possibility of interest rates remaining elevated for a longer period.

On the Multi Commodity Exchange (MCX), silver rate fell by 1.3% to ₹2,72,985 per kg, while MCX Gold price lost 0.34% to ₹1,58,534 per 10 grams. In the international markets, Spot silver dropped by 1.8% to $76.66 per ounce, while Gold prices also weakened, with spot gold falling 0.7% to $4,537.54 per ounce as of 0218 GMT.

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

The stronger US dollar made dollar-denominated precious metals more expensive for overseas buyers, limiting demand for silver and gold. The US dollar strengthened against all Group-of-10 currencies, while Treasury yields moved higher as cash trading resumed following a market break.

Geopolitical developments remained firmly in focus after US Central Command said American forces had carried out strikes in southern Iran targeting missile launch sites and boats attempting to lay mines. The US described the operations as defensive actions. Diplomatic efforts continued in the region, with Iran's top negotiator and foreign minister in Doha for discussions with Qatar's prime minister regarding a possible agreement with the United States aimed at ending the three-month-old conflict.

Meanwhile, Israel said it would intensify strikes against Hezbollah while negotiations between the US and Iran continued. Iran has maintained that any peace agreement must include an end to hostilities in Lebanon. US President Donald Trump had earlier said negotiations with Iran over an interim arrangement to extend the ceasefire and reopen the strait were "proceeding nicely."

Brent crude futures climbed 2% during early Asian trading on Tuesday as tensions between the US and Iran persisted. Rising crude oil prices have increased concerns that inflationary pressures could remain elevated globally, potentially forcing central banks to maintain tighter monetary policies for longer. While precious metals are generally viewed as a hedge against inflation, higher interest rates reduce the appeal of non-yielding assets such as silver and gold.

Read also: Gold and Silver Prices in India: A Review of Current Rates Across Major Cities

According to CME Group's FedWatch tool, markets are currently pricing in a US Federal Reserve rate hike before the end of the year, with a 56% probability of a move by December.