Silver prices surged to a fresh all-time high on the Multi Commodity Exchange (MCX) on Monday, driven by escalating geopolitical tensions in Iran, a weaker US dollar and rising expectations of interest rate cuts in the US. The sharp rally has once again put the spotlight on whether investors should hold on for further gains or begin booking profits.
In early trade, MCX silver jumped ₹10,109, or nearly 4 percent, to ₹2,62,834 per kg, compared with the previous close of ₹2,52,725. The rally mirrors strong momentum in global markets, where silver prices climbed close to 5 percent to $83.19 per ounce, after gaining more than 10 percent last week. Prices briefly touched a record high of $83.88 during the session.
Market participants said heightened unrest in Iran, marked by widespread protests and strong exchanges between Iranian and US officials, has increased demand for safe-haven assets such as precious metals. At the same time, concerns over the independence of the US Federal Reserve and softer US economic data have weighed on the dollar, providing further support to bullion prices.
“Precious metals have extended their structural bull run into the new year, with silver showing stronger momentum after recent volatility,” said Ponmudi R, CEO of Enrich Money. He noted that silver is benefiting from a combination of safe-haven buying and renewed industrial demand.
However, analysts cautioned that near-term volatility cannot be ruled out. Profit-taking, movements in the dollar and key macroeconomic data could trigger short-term corrections. Even so, experts believe any dips are likely to be shallow, supported by strong fundamentals, including supply constraints and rising demand from the solar, electric vehicle and electronics sectors.
With silver playing a dual role as both an industrial and monetary metal, the broader bullish trend is seen remaining intact in the near term.
(By arrangement with livemint.com)