At 10:35 am, the price of silver July futures in India plunged 1.81 per cent to Rs 2,71,700 per kilogram after a rally for the metal on Monday, and the gold futures slipped by 1.8 per cent.
Domestic silver prices dropped due to worldwide uncertainty, surging crude oil prices and the rising dollar-driven weakening and the reduction of investor demand for precious metals. Now, reported renewed tensions began after US forces reportedly went after missile launch stations in Iran and boats trying to lay mines.
The development fueled fears that the Middle East was undergoing a wave of geopolitical uncertainty that had sent the price of crude oil soaring and raised inflation fears in global markets. Not that domestic futures weren’t weak: Spot silver abroad made some headway.
According to NYMEX, spot silver was back about $76.96 per ounce. Comex gold, by contrast, bounced back, hovering around $4,530 per ounce. Market analysts said a strong U.S. dollar would have been a big reason for the selloff in silver prices. The Indian rupee lost 17 paise to the US currency Monday morning, easing as high as 95.43 from 95.26.
Month-end dollar demand and crude Oil price pushed investor sentiment lower. A stronger dollar generally makes dollar-denominated precious metals such as silver and gold costlier for overseas buyers, draining demand in overseas countries. This usually pressures global commodity prices.
Interestingly, the latest decline comes after silver prices ticked up nearly 2 per cent on Monday. Fears over a possible US-Iran peace struck had lifted investor sentiment and lifted precious metal prices following the previous session.
City-Wise Silver Prices In India Today
- Silver price in New Delhi: Rs 2,72,570 per kg
- Silver price in Mumbai: Rs 2,73,040 per kg
- Silver price in Bengaluru: Rs 2,73,250 per kg
- Silver price in Chennai: Rs 2,73,830 per kg
- Silver price in Kolkata: Rs 2,72,680 per kg
- Silver price in Hyderabad: Rs 2,73,390 per kg
International exchange rates could keep silver prices volatile for the coming days as a result of geopolitical developments, the dollar index and emerging global inflation expectations, experts said. Before investors invest in precious metals, they should watch movements in global markets and crude oil prices, they say, noting potential inflation.
