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Silver Tumbles Sharply on MCX
Silver prices experienced a significant sell-off on Thursday, plummeting by more than Rs 4,000 on the Multi Commodity Exchange (MCX). Around 12:30 pm, the precious metal was trading at Rs 2,70,112, down Rs 4,153 from its previous close. This sharp decline outpaced the more modest fall seen in gold prices during the same period.
Geopolitical Easing Impacts Safe Havens
One primary catalyst for silver's weakness is the improving outlook for peace between the United States and Iran. Recent statements from US President Donald Trump suggested negotiations were in their final stages, potentially reducing investor appetite for safe-haven assets. Historically, as fears of geopolitical conflict subside, investors tend to divest from assets like gold and silver, leading to price pressure.
Crude Oil Decline Adds to Pressure
Further contributing to the downturn, crude oil prices have also corrected sharply. After recently breaching the $105 per barrel mark, oil futures dropped over 6% to trade near the $99-$100 range. Declining oil prices often alleviate inflation concerns. When inflation worries cool, the demand for precious metals as a hedge against rising prices may diminish, impacting silver and gold.
However, crude oil remains at elevated levels, and its impact on inflation and business costs continues to be closely monitored.
Analyst Caution Amidst Volatility
Market experts suggest that traders are adopting a cautious stance, acknowledging that geopolitical tensions have not entirely dissipated. Ponmudi R, CEO of Enrich Money, noted that silver is currently testing key support levels. "MCX Silver opened with a sharp gap down and is currently holding above the Rs 2,72,000 mark," he stated. "Immediate resistance is placed at Rs 2,75,000–Rs 2,76,000; a sustained move above this zone could help stabilise prices and trigger a recovery toward Rs 2,78,000–Rs 2,80,000. On the downside, a break below Rs 2,71,000 may drag prices back to Rs 2,68,000–Rs 2,67,000."
Ponmudi R added, "Overall, the near-term bias remains cautious, while direction continues to depend on safe-haven demand and evolving geopolitical developments."
Gold Also Under Pressure
Gold prices also remained under pressure, with MCX gold trading at Rs 1,59,390, down Rs 616 around 12:30 pm. Ponmudi R observed that gold requires stronger momentum to mount a significant recovery, with its near-term direction contingent on global risk sentiment.