Silver rate today fell on stronger US dollar as US-Iran war rages, brent crude price crosses $100- Should you buy?

Silver, Gold Rate Today: Silver and gold prices declined on Monday, March 9, pressured by a strengthening U.S. dollar, which made dollar-denominated bullion more expensive for investors using other currencies. At the same time, rising energy prices heightened inflation concerns, reducing expectations of near-term interest rate cuts.

MCX Silver rate fell 1.4% to its day's low of ₹2,64,475 per kg while MCX Gold rate fell 1.1% to ₹1,59,826 per 10 gram.

In the international markets, Spot silver dropped 2.2% to $82.50 per ounce during early trading. Gold prices also moved lower. Spot gold slipped 1.7% to $5,082.51 per ounce as of 0233 GMT, while U.S. gold futures for April delivery fell 1.4% to $5,099.40.

Other precious metals also witnessed declines. Spot platinum dropped 2.8% to $2,076.07, while palladium fell 1.2% to $1,605.12.

Why are gold and silver prices falling?

The downturn in silver and gold prices came as the U.S. dollar strengthened, climbing to its highest level in more than three months. A stronger dollar typically pressures precious metals because it raises the cost of bullion for investors holding other currencies.

At the same time, U.S. Treasury yields moved higher, with the 10-year Treasury yield rising to a one-month high, increasing the opportunity cost of holding non-yielding assets such as gold.

Meanwhile, global energy markets saw sharp volatility. Crude oil prices surged more than 20% to above $110 per barrel after the widening U.S.-Israeli conflict with Iran prompted several major Middle Eastern oil producers to curb supply. The move reflected growing concerns that shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes, could face prolonged disruptions.

Moreover, Iran on Monday named Mojtaba Khamenei as the successor to his father, Ali Khamenei, as the country’s supreme leader, signalling that hardline leadership is expected to remain firmly in power.

Apart from the spike in crude oil prices, markets also reacted to remarks by U.S. President Donald Trump, who played down concerns over the recent surge in energy prices.

“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace,” Trump wrote on social media on Sunday evening Washington time.

Monetary policy expectations also shifted amid the changing macroeconomic environment. According to the CME Group’s FedWatch tool, investors widely expect the U.S. Federal Reserve to hold interest rates steady at the conclusion of its two-day policy meeting on March 18.

Market pricing also showed rising expectations that the Fed may delay rate cuts. The probability that the central bank will keep rates unchanged in June increased to more than 51%, up from below 43% last week.

What should you do?

According to Joseph Thomas, Head of Research at Emkay Wealth Management, silver and gold prices in global markets is influenced at the moment by geo-political developments as the Middle East situation is still ablaze, and not subsiding even after a week of combat. This is also be a time when the level of volatility is much higher in precious metals like gold and silver.

"It is only after the war situation subsides, that one could see the fundamental factors like the trajectory of US interest rates, the direction of the Dollar Index etc. becoming more prominent in guiding the direction of markets,” he said.

Meanwhile, Gaurav Garg, Research Analyst at Lemonn Markets Des believes technically, gold is expected to face resistance around ₹1,53,000, while key support is noted at ₹1,48,000, indicating a range to watch for traders in the coming sessions.

Meanwhile, Rick Kanda, Managing Director at The Gold Bullion Company suggested that precious metals are long-term investments, not a short-term trade, and market fluctuations are a natural part of the cycle, not a reason to panic. If you have invested in them for the right reasons, which are long-term financial storage, short-term declines in the market should not hurt your confidence.

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.