Silver Futures Plunge as Traders Seek Clarity After US-Iran Peace Pact Uncertainty Mounts

Silver Futures Plunge as Traders Seek Clarity After US-Iran Peace Pact Uncertainty Mounts​

Silver futures witnessed a sharp reversal on Tuesday, snapping a three-day rally as traders adopted a cautious stance amid uncertainties surrounding the proposed US-Iran peace agreement. The white metal declined significantly, prompting market participants to wait for more definitive international developments before resuming bullish bets.

Silver Market Decline Amid Geopolitical Ambiguity​

On the Multi Commodity Exchange, silver futures experienced a slump of Rs 2,129, or nearly 1 per cent. The commodity settled at ₹2,49,329 per kilogram in a business turnover of 11,023 lots. This sharp decline followed previous surges driven by optimism regarding potential de-escalation between Washington and Tehran.

Analysts noted that the uncertainty surrounding a formalized agreement has introduced caution into the market. Pinky Yadav, Commodity Fundamental Analyst at Choice Broking, stated that the absence of a published memorandum of understanding (MoU) leaves traders reluctant to extend bullish bets on the metal. This lack of concrete commitment is tempering the positive sentiment previously enjoyed by silver prices.

Global Precious Metal Dynamics and International Outlook​

In parallel international markets, Comex silver futures for the July contract saw a marginal rise, trading at USD 70.36 per ounce in New York. While some optimism persisted regarding global trade, the overall direction of the commodity is now heavily influenced by macroeconomic policy shifts.

The focus across bullion markets has increasingly moved from ongoing geopolitical tensions to pending monetary policy outcomes. Investors are keenly awaiting the US Federal Reserve’s first policy decision under Kevin Warsh on Wednesday. Markets are observing his assessment of inflation risks and the subsequent path for interest rates.

Central Banks Drive Future Precious Metal Movements​

Global central bank actions are now viewed by analysts as potentially more impactful than developments in West Asia. Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, pointed out that silver’s next movement may depend less on tensions in the Middle East and more on global policy decisions.

The Bank of Japan contributed to the cautious mood by raising its policy rate by one per cent. This move signaled a possibility of further tightening by the central bank. Such actions reinforce concerns that policymakers remain prioritized inflation control, even amid signs of easing energy prices globally. Any indication of a prolonged high-rate environment could significantly influence precious metals.