Silver Price Falters Amid Strengthening Dollar and Rising Oil Prices, Clouding Rate-Cut Prospects

Precious Metals Report

Silver and Gold Prices Under Pressure

The MCX silver rate fell by 0.86% to ₹2,66,174 per kg, while the MCX gold price declined by 0.4% to ₹1,61,081 per 10 grams on Thursday. Spot silver prices also slipped by 0.3% to $85.49 per ounce, while spot gold eased by 0.1% to $5,172.86 per ounce.

Macro Factors Weigh on Precious Metals

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The strengthening US dollar and fading hopes of near-term interest rate cuts have put pressure on precious metal prices. Higher oil prices and recent US inflation data have signalled persistent price pressures, leading to a decline in expectations of interest rate cuts by the US Federal Reserve.

Oil Prices Surge

Oil prices surged in early trade, with Brent crude futures jumping by $6.5 or 7.13% to $98.5 per barrel. US West Texas Intermediate (WTI) crude also rose by $6.1 or 7.1% to $93.43 per barrel.

Inflation Data

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The US consumer price index rose by 0.3% in February, matching forecasts and accelerating from January's 0.2% increase. On an annual basis, CPI increased by 2.4% in the year to February, in line with expectations.

Precious Metal Outlook

Renisha Chainani, Head of Research at Augmont, expects precious metal prices to navigate a tug-of-war between safe-haven demand triggered by geopolitical tensions and pressure from a stronger US dollar and rising Treasury yields. Chainani maintains a bullish outlook for gold, expecting prices to move towards $5,250 or ₹1,63,500 in the near term, with strong support seen around the $5,000 level or ₹1,58,500. For silver, Chainani expects the metal to reach the next upside target of $95 or ₹2,85,000, with strong support seen near $80 or ₹2,60,000.