Silver Price on MCX Falls 4% to ₹2.79 Lakh per Kg Amid Firm Dollar, Crude Price Rise

Silver Prices Plunge in India Amid Global Market Volatility

Silver prices in India witnessed sharp selling pressure on Friday, as a stronger US dollar, rising Treasury yields, and mounting inflation concerns weighed on sentiment in the precious metals market. Investors remained cautious ahead of the meeting between US President Donald Trump and Chinese President Xi Jinping later in the day, which added to the market volatility.

The global market also saw a decline in gold and silver prices due to fading hopes of near-term US Federal Reserve rate cuts following stronger-than-expected inflation data and persistent geopolitical uncertainty linked to the Iran conflict. MCX silver prices plummeted ₹11,644, or 4%, to ₹2,79,458 per kg, while gold prices fell as MCX gold dropped ₹1,623, or 1%, to ₹1,60,355 per 10 grams.

In the global market, spot silver declined 3.1% to $80.93 per ounce, while spot gold dropped 0.8% to $4,613.19 per ounce by 0205 GMT, marking its fourth straight session of losses and its lowest level since May 6. US gold futures for June delivery also slipped 1.4% to $4,619. Bullion prices have remained under pressure this week, with gold declining more than 2% so far.

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The decline in bullion prices can be attributed to the strength of the US dollar, inflation worries, and oil prices. Fresh US economic data showed wholesale inflation accelerated at its fastest pace since 2022 in April, while consumer inflation recorded its sharpest increase since 2023. The inflation readings pushed the US dollar and bond yields higher, reducing the appeal of non-interest-bearing assets such as gold and silver.

The dollar index has gained more than 1% this week, making bullion more expensive for holders of other currencies. At the same time, benchmark 10-year US Treasury yields climbed close to one-year highs, increasing the opportunity cost of holding precious metals. Meanwhile, concerns surrounding the Iran conflict continued to keep energy markets volatile, with the Strait of Hormuz, a key global energy shipping route, remaining effectively shut.

In addition to the global market volatility, India increased import duties on gold and silver to 15% from 6% earlier this week to discourage overseas bullion purchases and reduce pressure on foreign exchange reserves. The government raised the basic customs duty on several gold and silver import categories to 10% from 5%, while the 5% Agriculture Infrastructure and Development Cess (AIDC) remains unchanged, taking the effective import tax to 15%.

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According to Renisha Chainani, Head - Research at Augmont, the meeting between Trump and Xi on May 13-15 covered trade policy, Taiwan, artificial intelligence, and Iran-related tensions. Chainani noted that U.S. April Producer Prices posted their sharpest monthly increase since early 2022, while CPI accelerated to 3.8% — the highest reading since May 2023 — largely driven by energy cost pressures tied to the Iran conflict.

Chainani stated that markets have fully unwound expectations for any 2026 Fed rate cut, pushing gold lower to approximately $4,700, while silver maintained its footing near $90. Technically, she said, "Gold remains range-bound between $4,650 and $4,780, with no directional resolution. Silver has achieved the target of $90, next resistance is $92."