Silver Futures Drop Sharply on Multi Commodity Exchange
New Delhi, February 17: Silver prices declined sharply on Tuesday, falling more than 2 per cent in the domestic futures market, mirroring weakness in global cues and subdued liquidity due to market holidays across major Asian economies.On the Multi Commodity Exchange, silver contracts for March delivery plunged by Rs 6,330, or 2.64 per cent, to Rs 2,33,561 per kilogram. The decline was recorded in a business turnover of 5,820 lots, indicating active participation despite the price drop.
The correction in domestic silver futures came as international prices retreated significantly, exerting downward pressure on local markets.
Comex Silver Futures Fall Nearly 5% in Global Trade
In international markets, silver futures on the Comex slipped by USD 3.56, or 4.58 per cent, to trade at USD 74.39 per ounce.Silver fell below the USD 76 per ounce level as liquidity remained thin amid market holidays in China, Hong Kong, and other parts of Asia. Lower participation from key Asian markets contributed to heightened volatility and sharp price movements.
January Rally Reverses After Record High
Silver had witnessed an extraordinary rally in January, climbing to a record high above USD 120 per ounce. The surge was largely driven by speculative activity, particularly from Chinese traders.However, the rally reversed dramatically in the following weeks. Prices tumbled to around USD 64 per ounce earlier this month as leveraged positions were unwound and investors liquidated holdings to offset losses in other asset classes.
Authorities in China reportedly stepped in with measures aimed at curbing market risks after the sharp speculative spike in precious metals.
Focus Shifts to US Federal Reserve and Inflation Data
With US markets reopening, investor attention has now turned to upcoming macroeconomic triggers. Market participants are closely watching the release of the Federal Reserve’s meeting minutes and the core Personal Consumption Expenditures price index for fresh signals on monetary policy direction.Current market pricing indicates expectations of a potential rate cut in July, with a strong possibility of an earlier move in June, depending on incoming economic data.
The trajectory of interest rates and inflation readings is likely to influence silver and other precious metals in the near term, as traders reassess positioning following the recent volatility.
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