Silver prices declined 1.5% on Thursday, March 19 as the US Federal Reserve kept interest rate unchanged in its March meeting and maintained a hawkish stance, dampening expectations of aggressive rate cuts in the near term. However, a softer dollar capped the decline.
On MCX, silver price fell 1.5% to ₹2,44,342 per kg while gold price lost 0.8% to ₹1,51,712 per 10 grams
Spot silver rose 1.5% to $76.52 per ounce, recovering after recent weakness. Gold prices also stabilised, with spot gold gaining 0.8% to $4,856.82 per ounce as of 0115 GMT, after slipping earlier in the session to their lowest level since February 6. The rebound follows a sharp 3.7% decline in the previous session, highlighting the volatility gripping precious metals amid global macro uncertainty. Meanwhile, US gold futures for April delivery slipped 0.8% to $4,858.60.
Other precious metals also saw gains. Spot platinum rose 0.6% to $2,035.25, while palladium advanced 1.2% to $1,492.25, tracking the broader recovery across the metals complex.
Silver, gold prices: Why the fall today? Explained
The fall in precious metals was largely driven by both the US Federal Reserve and the Bank of Canada struck a hawkish tone in their latest policy updates. While both central banks kept interest rates unchanged, they warned that rising energy prices linked to the Iran conflict could trigger a more sustained inflationary cycle.
The Fed signalled just one rate cut for the year, falling short of market expectations for a more accommodative path. Chair Jerome Powell emphasised that any rate reduction would depend on clear progress in bringing inflation under control. Policymakers also flagged that the ongoing conflict has made the outlook for the US economy increasingly “uncertain.”
The combination of elevated oil prices, geopolitical tensions, and cautious central bank commentary has created a complex environment for precious metals. While higher-for-longer interest rates continue to limit the upside, safe-haven demand and inflation concerns are offering support.
Meanwhile, geopolitical risks remain front and centre. Reports suggest that US President Donald Trump’s administration is considering deploying thousands of troops to strengthen operations in the Middle East, signalling a potential escalation in the conflict.
However, dollar fell capping gains for gold and silver. Moreover, Crude oil prices also surged more than 5% to above $110 per barrel after Iran launched attacks on energy infrastructure across the Middle East, following a strike on its South Pars gas field. The situation was further exacerbated by the closure of the Strait of Hormuz, a critical global oil transit route, keeping crude prices elevated.
Rising oil prices have added to inflation concerns by increasing transportation and manufacturing costs globally. Typically, such an environment supports gold as an inflation hedge.
As markets navigate this uncertain landscape, precious metals are likely to remain volatile, caught between competing forces of safe-haven demand, inflation pressures, and restrictive monetary policy.
