Silver prices in India rose on Friday, March 27, supported by a weaker dollar and renewed bargain buying amid persistent geopolitical concerns. Gold also moved higher, tracking gains across the broader precious metals complex.
On MCX, silver price jumps 2.3% to its day’s high of ₹2,25,014 per kg while MCX gold rate advanced 1% to its intra-day high of ₹1,40,900 per 10 grams.
In the international markets as well, Spot climbed 1.1% to $68.80 per ounce, while spot gold rose 1.1% to $4,428.30 per ounce as of 0228 GMT. However, despite the day’s gains, has declined about 1.3% so far this week, reflecting underlying pressure on bullion prices. U.S. gold futures for April delivery also advanced 1.1% to $4,423.40.
Other precious metals also saw strong moves, with platinum rising 2.1% to $1,865.13 and palladium gaining 2.7% to $1,389.80, indicating broader strength in the metals segment.
What’s driving the prices
The rebound in silver and gold was largely driven by a softer U.S. dollar, which made dollar-denominated commodities more affordable for holders of other currencies, thereby boosting demand. Bargain hunting after recent declines also contributed to the uptick in prices.
Meanwhile, geopolitical developments continue to influence sentiment. U.S. President indicated that a pause on strikes against Iran’s energy infrastructure would be extended into April and described ongoing talks as progressing well. However, an Iranian official rejected the U.S. proposal to end the conflict, calling it “one-sided and unfair,” highlighting the uncertainty surrounding any potential resolution.
However, the broader trend remains under pressure due to rising energy prices and inflation concerns. Brent crude continued to trade above $105 per barrel, as the ongoing conflict has severely disrupted shipments through the Strait of Hormuz, a key route that handles nearly one-fifth of global and LNG flows.
Elevated oil prices are expected to push up transportation and manufacturing costs, thereby intensifying inflationary pressures globally. While gold is traditionally seen as a hedge against inflation, the current environment presents a challenge, as higher inflation is also leading to expectations of tighter monetary policy and elevated interest rates.
Higher interest rates typically reduce the appeal of non-yielding assets like gold and silver, limiting their upside even during periods of economic uncertainty. This dynamic has been a key factor behind the recent weakness in bullion prices despite ongoing geopolitical tensions.
Silver, Gold Outlook Ahead
more to come…