Silver rate in India jumps 1.5% to ₹2.82/kg on Hormuz tensions, weak dollar ahead of US inflation data

Silver prices in India climbed on Tuesday, 12 May, as rising tensions around the Strait of Hormuz, a weaker US dollar, and growing inflation fears pushed investors toward safe-haven assets. Traders also remained cautious ahead of a crucial meeting between US President Donald Trump and Chinese President Xi Jinping, while closely watching fresh developments in the Middle East conflict. Gold also rose.

In India, MCX silver rate advanced 1.5% to ₹2,82,463 per kg, while MCX gold price advanced 0.3% to ₹1,54,150/10 grams.

Silver prices extended gains, with spot silver rising 0.2% to $86.27 per ounce after surging more than 7% in the previous session, marking its strongest rally in over a month. Spot gold also advanced 0.5% to $4,757.59 per ounce by 0050 GMT, while US gold futures for June delivery rose 0.8% to $4,768.20.

Among other precious metals, platinum slipped 0.2% to $2,127, while palladium declined 0.2% to $1,506.34 per ounce.

Middle East conflict and inflation worries support bullion

Investor sentiment remained heavily influenced by the fragile situation in the Strait of Hormuz, a critical global oil shipping route. Concerns over disruptions in energy supplies pushed crude oil prices higher, raising fears of fresh inflationary pressures across global economies.

Trump intensified market anxiety after calling Iran’s response to a recent US peace proposal “a piece of garbage,” while also describing the ceasefire efforts as being on “massive life support.” His remarks suggested that negotiations between Washington and Tehran remained far from resolution.

The geopolitical uncertainty comes at a sensitive time for financial markets, with investors preparing for the latest US Consumer Price Index (CPI) data scheduled later in the day. Economists expect inflation to accelerate sharply following the spike in oil prices caused by the ongoing conflict, with higher energy costs likely to impact manufacturing and agricultural sectors.

A softer dollar and easing bond yields further supported bullion prices. Gold typically benefits when the greenback weakens because it becomes cheaper for overseas buyers. Lower bond yields also improve the appeal of non-interest-bearing assets such as gold.

Markets are also tracking Trump’s upcoming two-day visit to China, where he is expected to meet Xi Jinping to discuss trade relations, geopolitical tensions and the evolving Middle East crisis.

Meanwhile, oil prices continued to edge higher in Asian trading hours as investors remained uncertain over the possibility of a lasting ceasefire between the United States and Iran. Traders now await the US inflation print for further clues on the Federal Reserve’s future interest rate trajectory.

Silver, gold prices: Outlook ahead

Renisha Chainani, Head - Research at Augmont, noted that Silver has been ranging between $71–$82 (approximately ₹235K– ₹265K), and similarly, having touched the top of its range, a reversion toward support levels is likely in the near term.

For Gold, she said, "Gold has been trading within a $4,500–$4,750 range (approximately ₹148K– ₹154K). Having tested the upper boundary last week, profit-booking pressure may push prices back toward the lower end this week."

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