Crude Strength Lifts Inflation Expectations, Weighing on Silver Prices
Silver led the losses on the MCX on Wednesday, falling ₹2,216 or 0.95% to ₹2,30,203 per kg. Gold held almost flat at ₹1,54,223 per 10 grams, down a marginal ₹39 or 0.03%. The energy complex told a different story, with crude oil rising ₹49 or 0.60% to ₹8,192 per barrel and natural gas adding ₹1.5 or 0.57% to ₹266.3 per mmBtu.
The pressure on silver is coming from the energy market rather than from anything specific to the metal. Crude has pushed up toward a two-week high in international trade, with WTI trading near $85 a barrel, and firmer oil tends to lift global inflation expectations. This hurts non-yielding assets like silver most of all.
The supply-side worry underpinning the oil bid shows little sign of easing. President Donald Trump has said there are no talks or conversations underway or scheduled with Iran, which keeps the risk premium in crude intact and, by extension, keeps the inflation channel that is weighing on silver open.