Silver price rises 2% as crude oil supply fears ease; focus shifts to central bank decisions

Silver prices jumped on Tuesday, March 17 supported by easing concerns over prolonged disruptions of crude oil shipments amid prolonged US-Iran conflict. Meanwhile, investors awaited multiple central bank policy decisions this week.

On MCX, silver rate rose 2% to ₹2,61,457 per kg while gold price advanced 0.8% to ₹1,56,996 per 10 grams.

In the international markets, Spot silver rose 0.6% to $81.28 per ounce, while, Spot gold firmed 0.4% to $5,023.19 per ounce as of 0251 GMT. U.S. gold futures for April delivery rose 0.5% to $5,027.20.

Why precious metals are rising

The gain in precious metal prices is being driven by prolonged geopolitical tensions in the Middle East and rising oil prices. However, it has been capped on the back of a strengthening dollar.

The ongoing US-Israel-Iran conflict, now in its third week, has significantly disrupted global energy markets. Iran’s Foreign Minister Abbas Araghchi said on Monday that the Strait of Hormuz had not been completely shut, with some vessels still managing to pass through the crucial route.

However, oil prices remained elevated above $105 per barrel as the U.S.-Israeli conflict with Iran continued to keep the strait largely restricted, leaving several tankers stranded for weeks in what is being seen as an unprecedented disruption to global supply.

Meanwhile, US President Donald Trump reiterated his appeal for countries to step in and help reopen the vital shipping corridor, while expressing frustration over the lack of support.

At the same time, Israel signalled plans for at least three more weeks of military action, while Iranian drone strikes disrupted operations in the region, including a temporary shutdown of Dubai airport and damage to a key oil facility in the UAE.

These developments have pushed oil prices higher, which in turn raises inflation. Markets have started scaling back hopes of rate cuts by major central banks this year.

The US Federal Reserve is widely expected to keep rates unchanged for a second consecutive meeting when it announces its decision on Wednesday. Meanwhile, several major central banks — including those in the UK, euro zone, Japan, Australia, Canada, Switzerland, and Sweden — are also scheduled to meet this week, marking their first policy decisions since the escalation of the Iran conflict.

What's next for the precious metals?

Renisha Chainani, Head of Research at Augmont, highlighted that precious metals are currently navigating a phase of consolidation amid heightened global uncertainty, with key technical levels coming into focus for both gold and silver.

“Gold prices have established support at approximately $5,000, while silver has stabilized near the $80 mark. These levels represent critical support zones amid volatile market conditions driven by competing economic narratives,” she said.

She noted that the strengthening of the US dollar — which has moved above the 100 index level — has played a significant role in shaping bullion trends, as investors increasingly gravitate towards dollar-denominated assets during periods of geopolitical stress. This shift has been reinforced by the US’s relative advantage as a net crude exporter, compared to other major economies that remain dependent on oil imports, as well as the rising geopolitical risk premium following escalating tensions in the Middle East and disruptions around the Strait of Hormuz.

Chainani further explained that silver continues to hold firm around the $80 level, but warned that a sustained breach below this threshold could open the door for further downside towards $75 and even $70. On the other hand, a revival in buying interest could push prices higher towards $90 and potentially $95 in the near term.

“Gold is currently holding a critical support level near $5,000, which remains an important technical floor for the market. A decisive break below this level could trigger further downside, with the next key support emerging around $4,850,” she added.

She also indicated that if gold manages to hold above current levels and regain momentum, it could move higher towards $5,200 and subsequently test the $5,250 mark in the near term, supported by safe-haven demand and evolving macroeconomic conditions.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.