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NEW DELHI : Silver futures tumbled by Rs 9,031 to Rs 2.39 lakh per kilogram on Thursday, marking the seventh straight session of losses, as rising crude oil prices and a hawkish US Federal Reserve outlook dampened investors’ sentiment.
On the Multi Commodity Exchange, the white metal for the May delivery slumped by Rs 9,031, or 3.64 per cent, to Rs 2,39,163 per kilogram in a business turnover of 6,372 lots.
Analysts said persistent inflation concerns, driven by elevated crude oil prices, have reduced safe-haven demand for precious metals by lowering expectations of near-term interest rate cuts by the Federal Reserve.
Globally, silver futures for the May contract on the Comex extended losses for the seventh consecutive session, declining by USD 4.89, or 6.31 per cent, to USD 72.69 per ounce.
Silver hovered around USD 75 per ounce after a steep fall of 5 per cent in the previous session, as hawkish signals from the US Federal Reserve and surging oil prices weighed on bullion, Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said.
Echoing similar views, Renisha Chainani, Head of Research at Augmont, said silver prices remained under pressure as a firm US dollar outweighed safe-haven demand from tensions in West Asia. On Wednesday, the US Fed kept its benchmark interest rate unchanged but flagged upside risks to inflation stemming from the ongoing conflict in West Asia, signalling a cautious approach towards monetary policy easing.
The US central bank indicated that it will not cut rates until inflation shows signs of easing, even as it continues to project one rate reduction later this year.
Meanwhile, crude oil prices rallied sharply, with Brent futures exceeding USD 110 per barrel in the international markets following fresh attacks on energy infrastructure in the region.
Geopolitical tensions intensified after Iran launched missile strikes on key energy sites, including a Qatari facility housing the world’s largest LNG export plant, in retaliation for earlier strikes on its South Pars gas field.
“This marks a significant widening of the conflict, raising energy security concerns and inflation risks, while increasing uncertainty across global markets,” Chainani said.
According to analysts, the combined impact of geopolitical risks, rising energy costs, and a cautious monetary policy outlook is likely to put pressure on silver prices in the near term. (Agencies)
