Silver futures retreated by Rs 8,158 to Rs 2.26 lakh per kg, tracking weak global trends amid a strong dollar and rising expectations of higher interest rates by the US Federal Reserve.
On the Multi Commodity Exchange (MCX), the white metal for July delivery slumped by Rs 8,158, or 3.48 per cent, to Rs 2,26,152 per kilogram in a business turnover of 10,059 lots.
Similarly, the September contract also plunged by Rs 8,629, or 3.59 per cent, to Rs 2,31,509 per kg in 6,291 lots.
Analysts said bullion sentiment remained under pressure as traders reassessed the outlook for US monetary policy amid a rally in the dollar and elevated Treasury bond yields.
“Silver prices moved lower in the domestic markets, as a stronger US dollar and rising expectations of further interest rate hike by the Federal Reserve weighed on investor sentiment,” Navneet Damani, Head of Research – Commodities at Motilal Oswal Financial Services Ltd, said.
The dollar index is closer to one-year high, following possibility of a Fed rate hike as early as September and elevated Treasury bond yields, he added.
The weakness in domestic markets mirrored a sharp-selloff in the overseas trade.
In the international markets, Comex silver futures for July delivery fell $3.57, or 5.45 per cent, to $62.01 per ounce in New York.
“Silver saw a sharper decline in the overseas trade, dropping to $62 per ounce level as uncertainty surrounding US-Iran peace talks weighed heavily on market sentiment,” Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.
