Silver prices fell by Rs 1,137 to Rs 2.36 lakh per kilogram in futures trade on Wednesday, as traders reduced their positions amid concerns over rising crude oil prices and a strengthening US dollar.
On the Multi Commodity Exchange (MCX), silver contracts for May delivery declined by Rs 1,137, or 0.48 per cent, to Rs 2,36,208 per kg, with a business turnover of 2,020 lots. Similarly, the July contract dropped by Rs 1,964, or 0.81 per cent, to Rs 2,40,799 per kg in 6,868 lots.
“Silver prices weakened as stalled US-Iran negotiations and the continued closure of the Strait of Hormuz increased inflation concerns,” said Renisha Chainani.
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In overseas markets, silver futures on COMEX for May delivery slipped nearly 1 per cent to USD 72.67 per ounce in New York. Chainani noted that higher energy prices, a stronger dollar, elevated inflation expectations, and a prolonged higher interest rate outlook have collectively tightened short-term conditions for precious metals.
Meanwhile, US President Donald Trump confirmed that Tehran has formally requested Washington to lift its naval blockade, even as discussions to resolve the conflict continue. Analysts say the closure of the Strait of Hormuz has disrupted global oil supplies, a shock the International Energy Agency described as the largest on record. This has directly tightened energy flows from West Asia and intensified inflationary pressures across financial markets.
Market participants are increasingly factoring in the possibility that major global central banks may maintain or even raise interest rates further, a scenario that typically weighs on assets like gold and silver, Chainani added.
The Bank of Japan kept its policy rate unchanged earlier this week, while the US Federal Reserve, European Central Bank and the Bank of England are all set to announce their rate decisions in the coming days.
On the outlook, Chainani said silver is approaching USD 73 per ounce in global markets, equivalent to about Rs 2.35 lakh per kg domestically. If prices remain below this level, the next downside target could be USD 70 per ounce, or around Rs 2.25 lakh per kg.
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