Silver Price Plunges by ₹5,000 Amid Strengthening US Dollar and Escalating Hormuz Strait Tensions

Global Markets React to Tensions in the Middle East

The precious metals market experienced a downturn on Monday, April 20, as the dollar strengthened, pushing down the price of silver and gold. The MCX Silver rates fell approximately 2% to ₹2,52,250 per kg, while the MCX Gold price declined over 1% to ₹2,57,142 per 10 grams. This decline was also reflected in the spot market, with silver prices falling 0.5% to $80.36 per ounce.

In contrast, platinum prices remained steady at $2,103.38, while palladium slipped 0.1% to $1,556.45. Spot gold prices also declined, down 0.4% at $4,809.71 per ounce as of 0155 GMT. This was a new low for gold prices since April 13. U.S. gold futures for June delivery also declined 1% to $4,829.40.

The strengthening of the dollar, which made greenback-priced bullion more expensive for other currency holders, contributed to the decline in precious metal prices. Additionally, the rise in benchmark 10-year U.S. Treasury yields, which increased by 0.5%, reduced the appeal of non-yielding assets like precious metals.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The geopolitical situation in the Middle East also played a significant role in the market's volatility. Oil prices jumped, and global equity markets turned volatile as tensions in the region escalated. The U.S. seizure of an Iranian cargo ship attempting to breach its blockade raised concerns that the ceasefire between the two countries may not hold even for the brief two-day period it was expected to remain in force.

According to Mirae Asset Mutual Fund, silver prices are currently holding above the ₹2,48,000-₹2,45,000 support zone, which corresponds to the 20-week moving average and is critical for trend stability. The fund predicts that a deeper weekly support likely lies near ₹2,40,000-₹2,35,000, marking the prior consolidation base. On the upside, ₹2,60,000-₹2,65,000 remains a likely key resistance band.

Tata Mutual Fund noted that silver is a developing growth story, and the long-term trend is highly dependent on the broad recovery in industrial demand. The fund suggested that investors can look for a staggered approach to invest in the medium term to long-term investment, considering the volatile nature of the commodity.

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