New Delhi, March 25 Silver prices surged by Rs 12,861 to Rs 2.36 lakh per kilogram in futures trading on Wednesday, driven by a weak US dollar and easing inflation fears following a correction in crude oil prices.
Ending a 10-day decline, the white metal for May delivery soared by Rs 12,861, or nearly 6%, to Rs 2,36,802 per kilogram on the Multi Commodity Exchange.
Analysts said the sharp rebound in silver was largely driven by bullish sentiment in precious metals in overseas markets and a weak US dollar.
"The sharp rebound in silver on Wednesday was driven by a softer US dollar and easing inflation concerns as crude oil prices corrected," said Hareesh V, Head of Commodity Research, Geojit Investments Ltd.
He added that the pullback in energy markets helped temper expectations of higher global interest rates, providing additional support to precious metals.
In the international market, silver futures for the May contract increased by USD 3.87, or 5.56%, to USD 73.44 per ounce.
Silver prices opened higher globally by more than 3% as the dollar index eased following reports that the US is seeking a one-month ceasefire with Iran to conduct negotiation talks, said Aamir Makda, Commodity & Currency Analyst, Choice Broking.
Despite troop deployments, easing conflict fears, and a higher-for-longer interest rate signal from Federal Reserve Governor Michael Barr supported market sentiment, he added.
Hareesh further said that the upside of the precious metal was also driven by value buying after recent sharp corrections, with attractive entry levels triggering renewed demand alongside short covering.
On the outlook, he said the precious metal may witness a mild near-term recovery, but breaking recent highs looks difficult.
"While supportive geopolitics could underpin sentiment, a firm US dollar is likely to cap strong upside, keeping price movements relatively restrained for now," Hareesh said.
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