Silver Rate Plummets 2.5% in India as Gold Weakens Amid Crude Oil Surge Above $100

Silver Prices in India Decline Amid Global Market Weakness

Silver prices in India fell on Thursday, following a decline in precious metals globally due to concerns over inflation and prolonged high interest rates. The decline in silver prices comes as the global market remains uncertain over stalled U.S.-Iran peace talks.

The MCX Silver rate dropped by 2.5% or ₹6,100 to ₹2,42,220 per kg, while the MCX Gold price lost 0.6% or ₹1,000 to ₹1,51,719 per 10 grams. The decline in silver prices is in line with the global market trend, where spot silver fell 1.4% to $76.64 per ounce.

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The primary driver behind the decline in silver prices is the sharp rise in crude oil prices. Brent crude has remained above $100 per barrel following larger-than-expected draws in gasoline and distillate inventories in the United States, along with the lack of progress in U.S.-Iran peace negotiations. Higher crude prices tend to push up transportation and production costs, which feeds into broader inflation. This, in turn, reduces the likelihood of near-term interest rate cuts, a negative for non-yielding assets like silver.

Geopolitical tensions have further added to the pressure. Iran seized two ships in the Strait of Hormuz, tightening control over the key global oil transit route. This came after U.S. President Donald Trump called off planned attacks, with no clear signs of peace talks resuming. At the same time, the U.S. has maintained its naval blockade of Iranian trade routes, while Iran's parliament speaker and chief negotiator Mohammad Baqer Qalibaf said a full ceasefire would only be meaningful if the blockade is lifted, indicating a continued stalemate.

Adding to the bearish sentiment, a Reuters poll showed that the U.S. Federal Reserve is likely to delay interest rate cuts for at least six months, as energy-driven inflation risks persist. Market expectations have also shifted, with traders now pricing in only a 23% chance of a 25-basis-point rate cut in December, down from 28% a week earlier. Before the escalation in conflict, markets had anticipated two rate cuts this year.

The combination of rising oil prices, delayed rate cut expectations, and ongoing geopolitical tensions is weighing on silver, even as broader uncertainty remains elevated.

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