Silver futures decline Rs 1,137 to Rs 2.36 lakh/kg as oil rally weighs on bullion demand

Silver prices declined by Rs 1,137 to Rs 2.36 lakh per kilogram in futures trade on Wednesday as traders trimmed positions amid concerns over elevated crude oil rates and strengthening of the US dollar. On the Multi Commodity Exchange (MCX), the white metal for May delivery decreased by Rs 1,137, or 0.48 per cent, to Rs 2,36,208 per kg in a business turnover of 2,020 lots. Similarly, the July contract also plunged by Rs 1,964, or 0.81 per cent, to Rs 2,40,799 per kg in 6,868 lots. ''Silver prices decreased as stalled US-Iran negotiations and the continued closure of the Strait of Hormuz heightened inflation concerns,'' Renisha Chainani, Head of Research at Augmont, said. In the overseas markets, Comex silver futures for the May contract slipped nearly 1 per cent to USD 72.67 per ounce in New York. ''Higher energy prices, a strengthening dollar, elevated inflation expectations, and a persistent higher-for-longer interest rate outlook have collectively tightened short-term conditions for precious metals,'' Chainani added. Meanwhile, US President Donald Trump confirmed that Tehran has formally requested Washington to lift its naval blockade while conflict resolution talks remain ongoing. According to analysts, the closure of the Strait of Hormuz has disrupted global oil supply, a shock the International Energy Agency classified as the largest on record, directly tightening energy flows from West Asia and amplifying inflationary pressure across financial markets. Market participants are increasingly pricing in the likelihood that major global central banks will maintain or further raise interest rates, a scenario that structurally weakens the case for assets such as gold and silver, Chainani said. The Bank of Japan held its policy rate steady earlier this week, while the US Federal Reserve, European Central Bank, and the Bank of England are all scheduled to deliver their rate decisions in the coming days, she added. On the outlook, Renisha Chainani said silver is nearing the USD 73 per ounce in the global markets, equivalent to Rs 2.35 lakh per kg on the domestic front. If prices sustain below this level, the next downside target could be USD 70 per ounce or around Rs 2.25 lakh per kg.

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