Silver prices slide as investors retreat amid geopolitical uncertainty

Silver prices witnessed a sharp decline on Friday, extending recent losses as investors reduced exposure to precious metals amid uncertainty surrounding the proposed US-Iran peace agreement and a broader sell-off across global markets.

On the Multi Commodity Exchange (MCX), silver futures for July delivery fell by Rs 8,766, or 4 per cent, to Rs 2,28,806 per kilogram. Trading activity remained robust, with more than 11,000 lots changing hands during the session.

The latest fall came after a steep correction in the previous trading session, when silver prices dropped by Rs 14,235, or 5.7 per cent, ending at Rs 2.37 lakh per kilogram compared with Rs 2.51 lakh per kilogram a day earlier.

Market participants attributed the decline to growing doubts over progress in diplomatic efforts aimed at easing tensions between the United States and Iran. Optimism surrounding a potential peace framework weakened after high-level talks scheduled in Switzerland were called off, casting uncertainty over the implementation of measures intended to end hostilities in the region.

Reports also indicated that US vice-president J.D. Vance had postponed a planned visit to Switzerland, while no Iranian delegation had been officially confirmed for the discussions.

The developments fuelled fresh concerns over the timeline for restoring oil flows through the Strait of Hormuz, a critical global energy route.

According to Kaveri More, commodity analyst at Choice Broking, silver on the MCX continued its downward trend for a fourth consecutive week, with Friday's decline alone accounting for nearly 4 per cent.

Analysts also pointed to currency movements as a contributing factor. Renisha Chainani, Head of Research at Augmont, said the sell-off had been intensified by a stronger rupee, which climbed to a six-week high against the US dollar on the back of improving capital inflows and stronger investor sentiment.

The weakness was mirrored in international markets. In New York, Comex silver futures for July delivery declined by $2.85, or 4.3 per cent, to $63.46 per ounce.

Despite ongoing diplomatic efforts, geopolitical risks remain elevated. Market observers noted that concerns persisted after Israel reportedly carried out fresh strikes in Lebanon, underscoring the fragile security situation in West Asia.

Analysts expect bullion prices to remain volatile in the near term as investors continue to monitor geopolitical developments, central bank policy signals and the outlook for global economic growth. Uncertainty over interest rates and regional tensions is likely to keep sentiment in precious metals markets highly sensitive in the coming weeks.

With PTI inputs