Silver prices fell on Wednesday, amid uncertainty surrounding the release of the minutes from the April meeting of the US Federal Reserve. Hopes for cooling tensions with Iran in the United States dampened losses for precious metals as a result of rising US Treasury yields and higher crude oil prices.
Silver July futures fell 1.06% to Rs. 2,67,258 per kg on the Multi-Commodity Exchange (MCX), while Gold prices backed 0.5% to Rs. 1,58,281 per 10 grams.
Globally, however, spot silver rose 1% to $74.55 per ounce, while spot gold gained 0.4% to $4,499.69 per ounce. The June gold futures contract for US delivery rose 0.2% to $4,502.30 an ounce.
The drop in domestic precious metal prices was offset by high US Treasury yields. The benchmark 10-year US Treasury note rate remains around 4.67%, and the 30-year bond rate rose to 5.20%, its highest level since 2007.
Market analysts say that with higher yields, there is less interest in non-yielding assets like gold and silver, especially if investors believe rates will stay higher for the long term.
The recent rise in yields has been rationalised by concerns over the West Asian conflict, uncertainty around the Strait of Hormuz, inflation, and high oil prices.
Market participants are now closely watching the US Federal Reserve's April meeting minutes for new guidance on the interest rate outlook.
According to reports, investors are looking to gauge whether the Fed could postpone rate cuts, as the inflation threat has grown, amid increased energy costs.
The volatility in markets continued as US President Donald Trump made comments on Iran. Trump said that the United States is “in a position to strike Iran again” if they should deem it necessary, while US Vice President JD Vance said that there was “considerable progress” in the negotiations between the two countries.
Meanwhile, Brent crude futures fell 1.10% to $110.1 a barrel. US West Texas Intermediate (WTI) fell 1.11% to $103 a barrel.
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Renisha Chainani, Head-Research at Augmont, notes that silver has critical support around $75. A break below this could drag the metal to deeper levels at $70 and $67.
On the upside, a rebound from current levels could take the prices back toward the $80-$82/oz zone, said Chainani.
She noted that gold has come to rest near the $4,500 per ounce mark. Conversely, if prices stabilize and recover from this zone, the initial upside target is seen at the $4700-$4750 range