Silver Prices Recover Modestly After Sharp Correction Amid Global Economic Uncertainty

Silver prices have been volatile over the past few sessions, experiencing a sharp correction before recovering modestly. As of September 30, MCX silver futures were trading at ₹2.26 lakh per kg, while the domestic 999-fine silver rate was ₹2,26,750 per kg.

The recent movement in silver prices follows a steep sell-off, with the MCX December silver contract trading at ₹2.25 lakh per kg on Tuesday, down 0.93% or about ₹2,064 per kg from the previous close of ₹2.27 lakh. International silver had fallen 4.6% to $61.34 per ounce on Monday due to a stronger US dollar and rising US Treasury yields.

According to Ponmudi R, Founder and CEO of Enrich Money, gold and silver are facing pressure as markets focus more on yields, the dollar, and interest-rate expectations despite ongoing geopolitical tensions. Higher yields increase the opportunity cost of holding gold and silver, which do not generate interest income.

Silver is also linked to manufacturing activity and industrial demand, making it vulnerable to concerns around global growth, manufacturing activity, and demand from China. Gold prices, on the other hand, remained higher on September 30, with Bullions.co.in putting the 24K gold rate at ₹15,025 per gram or ₹1,50,250 per 10 grams.

Experts suggest that investors should watch US inflation and employment data, Treasury yields, the dollar, and crude oil prices for the next direction of bullion prices. For long-term investors, considering staggered buying rather than attempting to time the market bottom is advised.