Silver Futures Soar by Rs 12,861 to Rs 2.36 Lakh/kg Amid Weak Dollar

Analysts said the sharp recovery in silver was largely due to bullish sentiment in precious metals in overseas markets and a weak US dollar.

“Silver’s sharp recovery on Wednesday was driven by weakening US dollar and easing inflation concerns coupled with correction in crude oil prices,” said Hareesh V, Head of Commodity Research, Geojit Investments Ltd.

He added that the downturn in energy markets helped soften expectations for higher global interest rates and provided additional support for precious metals.

In the international market, silver futures for May delivery increased by US$ 3.87, or 5.56 percent, to US$ 73.44 per ounce.

Choice Broking Commodity and Currency Analyst Aamir Makda said that silver prices opened with a rise of more than 3 percent worldwide as the dollar index weakened following reports that the United States wanted a one-month ceasefire to hold negotiation talks with Iran.

He added that despite the troop deployment, waning conflict fears and Federal Reserve Governor Michael Barr signaling higher interest rates in the longer term are supporting market sentiment.

Hareesh also said that the precious metal’s rise was driven by value buying following recent sharp corrections, with attractive entry levels triggering renewed demand as well as short-covering.

He said it looks like the precious metal may experience a moderate recovery in the short term, but it appears difficult to break recent highs.

“While it could support supportive geopolitical sentiments, a strong US dollar is likely to keep price movements relatively limited, limiting the strong upside for now,” Hareesh said.