Silver price on MCX falls to 2.73 lakh/kg on a strong dollar, oil price surge and US Fed rate hike concerns

Silver rate today: Silver prices in India eased on Friday as a stronger U.S. dollar and rising oil prices dampened investor sentiment. Investors were on edge amid persistent inflation concerns and expectations of further monetary tightening by the U.S. Federal Reserve. Heightened geopolitical tensions surrounding U.S.-Iran negotiations also kept market sentiment cautious, supporting safe-haven demand for precious metals.

On MCX, Silver price fell 0.5% to ₹2,73,266 per kg while MCX Gold also declined 0.5% to ₹1,58,816 per 10 grams.

Spot silver fell 0.7% to $76.18 per ounce by 0222 GMT. Despite the decline in the latest session, the white metal was still headed for a weekly gain of around 0.4%, outperforming gold during the week. Gold prices also traded lower during the session, reflecting broader weakness in precious metals. Spot gold fell 0.4% to $4,522.89 per ounce, while U.S. gold futures for June delivery declined 0.4% to $4,524.40.

The precious metals market remained volatile as traders reacted to a stronger U.S. dollar and rising Treasury yields. The dollar hovered near a six-week high, making dollar-priced commodities more expensive for holders of other currencies and limiting buying interest in silver and gold.

Silver also came under pressure from rising bond yields as investors increasingly priced in the possibility of another interest rate hike by the U.S. Federal Reserve later this year. Higher interest rates generally reduce the appeal of non-yielding assets like silver and gold because investors tend to shift toward interest-bearing instruments.

At the same time, uncertainty surrounding the U.S.-Iran discussions kept markets cautious. U.S. Secretary of State Marco Rubio said there had been “some good signs” in talks with Iran, although major sticking points continued to remain, including Tehran’s uranium stockpile and control over the Strait of Hormuz.

Oil prices and Fed outlook remain key market triggers

Crude oil prices climbed sharply as traders remained doubtful about the prospects of a significant breakthrough in the U.S.-Iran talks. Brent crude recovered part of the previous session’s losses and rose nearly 2% to trade close to $105 per barrel.

The rally in crude oil prices has heightened concerns that inflation could stay elevated for a longer period. Rising energy prices are considered a major inflationary risk because they increase transportation and manufacturing costs globally, potentially forcing central banks to maintain tighter monetary policies.

Concerns over a prolonged disruption in the Strait of Hormuz, one of the world’s most important oil transit routes, also unsettled financial markets. Investors feared that any escalation in the region could impact global oil supplies and keep inflationary pressures elevated.

Although precious metals such as silver are traditionally viewed as a hedge against inflation, the prospect of higher interest rates has created pressure on the sector. Market participants increasingly expect the Federal Reserve to maintain a hawkish stance if inflation remains elevated due to rising oil prices.

According to CME Group’s FedWatch tool, traders are currently pricing in nearly a 60% probability of a U.S. Federal Reserve rate hike before the end of the year.

Meanwhile, investors also monitored developments at the U.S. central bank after the White House announced that U.S. President Donald Trump would swear in Kevin Warsh as the new Federal Reserve chair on Friday.

(With inputs from agencies)