Silver price muted as crude oil price rally offset gains from a weaker dollar - Key levels to watch

Silver rate declined on MCX on Friday led by surging crude oil prices and a firm dollar amid prolonged US-Iran war. Moroever, recent inflation data indicate that price growth remains under control which dented hopes for a rate cut.

MCX silver price declined 2.7% to ₹2,60,752 per kg while MCX gold price was down 0.9% at ₹1,58,764 per 10 grams.

Meanwhile, in the international market, Spot silver rose 1.4% to $84.96 per ounce. Meanwhile, Spot gold gained 0.8% to $5,118.75 per ounce as of 0234 GMT, while U.S. gold futures for April delivery remained unchanged at $5,123.30.

Among other precious metals, Spot platinum advanced 0.9% to $2,151.97 and palladium climbed 1.4% to $1,640.64.

Despite the uptick, bullion has declined roughly 1% so far this week. Concerns over inflation and uncertainty around the Federal Reserve’s ability to cut rates if oil prices remain elevated are partially offsetting safe-haven appeal in gold and silver.

Why gold, silver rose on Friday?

The main reason was a weaker dollar. The dollar slipped slightly on Friday, making dollar-denominated commodities such as bullion more affordable for holders of other currencies. Meanwhile, U.S. 10-year Treasury yields eased, improving the attractiveness of non-yielding assets like gold.

Moroever, adding to geopolitical tensions, Iran’s Supreme Leader Mojtaba Khamenei said on Thursday that Tehran would keep the strategic Strait of Hormuz closed as leverage against the United States and Israel. The move has heightened concerns over global energy supply and risk assets.

It also led to crude oil prices surging above $100 per barrel again, fueling inflation worries, after attacks on oil tankers in the Gulf and warnings from Iran dampened hopes of a quick de-escalation in the Middle East conflict.

As oil prices rallied, U.S. President Donald Trump once again urged Federal Reserve Chair Jerome Powell to cut interest rates. Traders currently expect the Fed to keep interest rates unchanged in the 3.5%-3.75% range at the conclusion of its two-day meeting on March 18, according to CME Group’s FedWatch tool.

While recent inflation data indicate that price growth remains under control, the war involving Iran and the resulting spike in crude prices have yet to be reflected in the economic data.

What Should Investors do? - Key levels to watch

Precious metals are expected to remain supported amid ongoing geopolitical tensions and market uncertainty, with analysts maintaining a bullish outlook on both gold and silver. Experts believe that strong fundamentals and safe-haven demand could continue to drive prices higher in the near term, even as short-term corrections offer buying opportunities for investors.

Renisha Chainani, Head - Research at Augmont stated that after achieving the target of $90, Silver also remains firmly supported and is continuing its upward momentum, with the next upside target seen around $95 ( ₹285,000). On the downside, strong support is placed near $80 ( ₹260,000), suggesting that any short-term corrections could attract fresh buying interest, she added.

For Gold she said that the yellow metal continues to maintain a bullish bias, with prices expected to move towards $5250 ( ₹163,500) and $5300 ( ₹165,000) in the near term. Strong support is seen around the $5000 ( ₹158,500) level, which is likely to act as a key buying zone on any corrective dips.

Meanwhile, Tata Mutual fund advised, "Silver prices have witnessed volatile move post tensions in Middle East and rose in geopolitical uncertainties. We reiterate investing in silver over supportive fundamentals and market uncertainties. Any decline in prices over dollar rally or ease in tensions provides opportunity to accumulate/invest in gold and silver."

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.