Market Pressure on Silver: Oil Prices and Interest Rates Drive Losses

Silver Prices Extend Losses for Seventh Session as Fed Signals and Crude Oil Surge Weigh on Market​

Silver Futures Drop Sharply on MCX Amid Weak Investor Sentiment​

New Delhi, March 19: Silver futures continued their downward trajectory on Thursday, falling by ₹9,031 to ₹2.39 lakh per kilogram on the Multi Commodity Exchange, marking the seventh straight session of losses.

The May delivery contract declined by 3.64 percent to ₹2,39,163 per kilogram, with a trading volume of 6,372 lots, reflecting sustained pressure on the white metal.

Hawkish US Federal Reserve Outlook Dampens Bullion Demand​

Investor sentiment remained subdued as concerns over inflation persisted, driven largely by elevated crude oil prices. Market participants are increasingly expecting the US Federal Reserve to maintain interest rates in the near term, reducing the appeal of non-yielding assets like silver.

The US Federal Reserve, in its latest policy decision on Wednesday, kept benchmark interest rates unchanged while highlighting inflation risks linked to ongoing geopolitical tensions. The central bank signaled a cautious stance on monetary easing, indicating that rate cuts would depend on clear signs of easing inflation, even as it continues to project one reduction later this year.

Global Silver Prices Mirror Decline on Comex​

In international markets, silver futures for May delivery on the Comex also extended losses for the seventh consecutive session. Prices fell by USD 4.89, or 6.31 percent, to USD 72.69 per ounce.

Silver hovered near USD 75 per ounce after witnessing a sharp 5 percent drop in the previous session, as global cues remained unfavorable for bullion.

Strong Dollar and Rising Oil Prices Add Pressure​

A strong US dollar further weighed on silver prices, offsetting demand for safe-haven assets despite escalating tensions in West Asia.

At the same time, crude oil prices surged sharply, with Brent futures crossing USD 110 per barrel in international markets. The spike followed fresh attacks on key energy infrastructure in the region.

Geopolitical Tensions Escalate in West Asia​

Tensions intensified after Iran launched missile strikes on major energy sites, including a facility in Qatar that houses the world's largest LNG export plant. The move came in response to earlier strikes on Iran’s South Pars gas field.

The escalation has raised concerns over global energy security and added to inflationary pressures, creating uncertainty across financial markets.

Outlook: Silver Likely to Remain Under Pressure​

The combined impact of rising energy costs, geopolitical risks, and a cautious monetary policy outlook is expected to keep silver prices under pressure in the near term, as investors remain wary of inflation and interest rate trends.