Silver Price in India Increases 1.5% to ₹2.82/kg Amid Hormuz Tensions and Weak US Dollar Ahead of US Inflation Data

Global Markets: Silver and Gold Prices Rise Amid Rising Tensions and Inflation Fears

On Tuesday, 12 May, silver prices in India surged as investors sought safe-haven assets due to rising tensions around the Strait of Hormuz, a weaker US dollar, and growing inflation fears. The MCX silver rate advanced 1.5% to ₹2,82,463 per kg, while the MCX gold price rose 0.3% to ₹1,54,150/10 grams.

The spot silver price rose 0.2% to $86.27 per ounce, following a surge of more than 7% in the previous session, marking its strongest rally in over a month. The spot gold price also advanced 0.5% to $4,757.59 per ounce by 0050 GMT, while US gold futures for June delivery rose 0.8% to $4,768.20.

Precious Metals Prices Comparison

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The fragile situation in the Strait of Hormuz, a critical global oil shipping route, has pushed investor sentiment towards safe-haven assets. Concerns over disruptions in energy supplies have raised fears of fresh inflationary pressures across global economies. US President Donald Trump's recent remarks on the Iran-US peace proposal and ceasefire efforts have intensified market anxiety, suggesting that negotiations between Washington and Tehran remain far from resolution.

The geopolitical uncertainty comes at a sensitive time for financial markets, with investors preparing for the latest US Consumer Price Index (CPI) data scheduled later in the day. Economists expect inflation to accelerate sharply following the spike in oil prices caused by the ongoing conflict, with higher energy costs likely to impact manufacturing and agricultural sectors.

A softer dollar and easing bond yields have further supported bullion prices. Gold typically benefits when the greenback weakens because it becomes cheaper for overseas buyers. Lower bond yields also improve the appeal of non-interest-bearing assets such as gold.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Markets are also tracking US President Trump's upcoming two-day visit to China, where he is expected to meet Chinese President Xi Jinping to discuss trade relations, geopolitical tensions, and the evolving Middle East crisis. Oil prices continued to edge higher in Asian trading hours as investors remained uncertain over the possibility of a lasting ceasefire between the United States and Iran.

Market Outlook

According to Renisha Chainani, Head - Research at Augmont, silver has been ranging between $71–$82 (approximately ₹235K– ₹265K) and is likely to revert to support levels in the near term. For gold, she noted that gold has been trading within a $4,500–$4,750 range (approximately ₹148K– ₹154K) and may experience profit-booking pressure, pushing prices back toward the lower end this week.