Silver Futures Tumble on Iran Tensions

New Delhi, May 27 (PTI) Silver prices declined sharply by Rs 3,876 to Rs 2.66 lakh per kilogram in futures trade on Wednesday amid weak overseas cues and heightened geopolitical tensions in West Asia.

On the Multi Commodity Exchange, the white metal for July delivery depreciated by Rs 3,876, or 1.43 per cent, to Rs 2,66,752 per kg in a business turnover of 9,740 lots.

On Tuesday, silver settled lower by Rs 6,088 to Rs 2,70,628 per kg.

Silver prices declined on Wednesday in line with losses in the overseas markets amid ongoing geopolitical tensions and fluctuations in global crude prices, Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.

In the international markets, Comex silver futures for July contract slipped nearly 2 per cent to USD 75.35 per ounce in New York.

Silver prices remained under pressure after recent US military strikes on southern Iran weakened hopes of a near-term diplomatic breakthrough between Washington and Tehran, Renisha Chainani, Head of Research at Augmont, said.


Rising oil prices following the military escalation revived concerns over energy-driven inflation, creating a mixed environment for precious metals, she said.

"While safe-haven demand typically supports precious metals, the concurrent inflation risk is simultaneously strengthening the US dollar and lifting bond yields, limiting any meaningful upside from a flight-to-safety bid," Chainani said.

Meanwhile, US President Donald Trump said that diplomatic engagement with Iran was continuing, but warned that further military action remained possible if negotiations fail.

According to reports, Trump is expected to chair a cabinet meeting later in the day, with the Iran conflict likely to dominate discussions.

At the same time, the proposed peace agreement between the US and Iran appeared to remain under negotiation despite recent strikes conducted by Washington against Iran.

Iran's foreign ministry condemned the US strikes near the Strait of Hormuz as "an act of bad faith" and a violation of the ceasefire, but stopped short of withdrawing from ongoing talks.