Silver rate today declined sharply on Monday, April 13, weighed down by a stronger dollar and a surge in oil prices after U.S.-Iran peace talks failed. This led to concerns regarding persistent inflation, which could delay Federal Reserve rate cuts this year.
On MCX, Silver price fell 2.5% to ₹2,37,190 per kg while Gold price lost 0.8% to ₹1,51,457 per 10 grams.
Spot silver fell 2.2% to $74.23 per ounce, reflecting broad weakness across precious metals. The decline came as spot gold dropped 0.6% to $4,718.98 per ounce as of 0222 GMT, after hitting its lowest level since April 7 earlier in the session. U.S. gold futures for June delivery also slipped 1% to $4,742, indicating continued pressure across the complex.
Among other metals, platinum fell 0.5% to $2,034.95, while palladium rose 1% to $1,535.77.
Silver, Gold: What led to today’s fall?
The primary trigger behind the decline is the dollar strengthening 0.4%, adding pressure to precious metals. A stronger dollar makes dollar-denominated metals more expensive for other currency holders, dampening demand. Silver is also facing additional pressure due to its industrial nature, as rising energy costs and prolonged geopolitical tensions raise concerns about slower global growth.
At the same time, a sharp jump in oil prices, which climbed to around $104 per barrel after the U.S. Navy prepared a blockade of the Strait of Hormuz following failed U.S.-Iran talks. The move raised concerns over disruptions to Iranian oil shipments, while Iran’s Revolutionary Guards warned that any military vessels approaching the Strait would be treated as a ceasefire breach and dealt with decisively, escalating geopolitical tensions.
This surge in oil prices fuelled inflation worries, which in turn is reshaping interest rate expectations. Traders now see little chance of a U.S. Federal Reserve rate cut this year, a sharp shift from earlier expectations of two rate cuts before the Middle East conflict began. Higher-for-longer interest rates reduce the appeal of non-yielding assets like silver. While inflation typically supports safe-haven demand for precious metals, the current environment of elevated interest rates is offsetting that benefit.
more to come…..