Silver prices dropped by Rs 621 to Rs 2.62 lakh per kilogram in futures trade on Thursday amid weak global trends and concerns that elevated crude oil rates could keep interest rates higher for longer by central banks.
On the Multi Commodity Exchange, the white metal for July delivery depreciated by Rs 621, or 0.24 per cent, to Rs 2,62,337 per kg in a business turnover of 11,830 lots.
Analysts said the decline in silver prices came as renewed tensions in West Asia kept energy markets on edge, sustaining concerns that oil rates could feed into global inflation and delay any monetary policy easing by major global central banks.
“Silver prices are trading on a weak footing on Thursday, pressured by rising expectations that central banks may be compelled to tighten monetary policy in response to an energy-driven inflation shock linked to the conflict in West Asia,” Renisha Chainani, Head of Research at Augmont, said.
Globally, Comex silver futures for July delivery fell 0.55 per cent to USD 73.28 per ounce in New York.
Chainani said persistent uncertainty over a US-Iran ceasefire continues to support elevated oil prices, reigniting inflationary concerns, while dollar strength has partly offset the conventional safe-haven demand for precious metals.
Analysts noted that weeks of intermittent diplomacy and military flare-ups have failed to produce a breakthrough on reopening the Strait of Hormuz, a vital artery for global oil supplies.
Washington and Tehran have also sent conflicting signals with Iran saying no meaningful progress has been achieved while President Donald Trump told reporters at the White House that a deal could still materialise “over the weekend.” Iranian Foreign Minister Abbas Araghchi said communication channels with Washington were still open but warned that any Israeli strikes on Beirut could trigger a “full-scale resumption” of the conflict.