Silver Futures Tumble Over Rs 8,000 on Strong Dollar, Fed Rate Hike Concerns

Similarly, the September contract fell 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 subdued as traders reassessed the outlook for U.S. monetary policy following a rally in the dollar and a rise in Treasury yields.

Motilal Oswal Financial Services Ltd. Navneet Damani, Head of Commodity Research, said, “Silver prices fell in domestic markets as the strengthening US dollar and rising expectations of further interest rate hikes by the Fed weighed on investor sentiment.” he said.

He added that the dollar index approached its highest level in a year following the possibility of the Fed raising interest rates in September and the increase in Treasury bond yields.

Weakness in domestic markets reflects sharp selloffs in foreign trade.

In international markets, Comex silver futures for July delivery fell US$3.57, or 5.45 percent, to US$62.01 per ounce in New York.

“Silver saw a sharper decline in overseas trade, falling to $62 per ounce as uncertainty over US-Iran peace talks weighed heavily on market sentiment,” said Gaurav Garg, Research Analyst at Lemonn Markets Desk. he said.

Market participants also evaluated the developments in the global energy market after the USA granted Iran a 60-day oil sales license, and this increased the expectation of a rapid recovery in crude oil supply.

As traffic in the Strait of Hormuz improves, manufacturers such as Kuwait and the United Arab Emirates have stepped up efforts to secure alternative routes.

Meanwhile, investors are waiting for new inflation signals from Washington.

“Traders will focus on the upcoming Personal Consumption Expenditures report, which is the Fed’s preferred measure of inflation and is expected to shed new light on underlying price pressures,” said Augmont Research President Renisha Chainani.