Silver rallies to fresh all-time high, nears Rs 1.15 lakh per kg mark; Hindustan Zinc shares up 2%

The sharp rise in silver prices came as its safe haven appeal outshone the downturn in the equity market amid global uncertainties. US President Donald Trump on July 12 threatened to impose a 30 percent tariff on imports from Mexico and the European Union starting on August 1. Earlier, he slapped 35 percent tariff on Canada, while warning of further hikes if they retaliate.

Additionally, rupee opened 21 paise lower on rising dollar amid renewed tariff threats from US President Donald Trump, intensifying trade concerns. This further strengthened silver prices.

Gold rallies

Gold prices also surged. The yellow metal's August futures on the MCX were trading at around Rs 98,170 per 10 grams. Domestic rates of gold rose, with the price of 10 grams of 24k gold standing at around Rs 99,880.

Here's what analyst says

"Silver outshined most commodities last week with marking an all-time high mark on domestic front and hovering around $40 on COMEX. Gold prices also touched a three-week high, supported by safe-haven demand after U.S. President Donald Trump threatened to impose a 30% tariff on imports from the European Union (EU) and Mexico starting on August 1. Both the EU and Mexico described the tariffs unfair and disruptive, while the E.U. said it would extend its suspension of countermeasures to U.S. tariffs until early August and continue to press for a negotiated settlement. Chicago Fed Bank President Austan Goolsbee said the new tariffs unveiled by Trump could spark fresh concerns about inflation, which might force the Fed to maintain its wait-and-see posture," said Manav Modi, Senior Analyst of Commodity Research at Motilal Oswal Financial Services.

"Investors now await the U.S. inflation data for June due tomorrow for more cues on the Federal Reserve's interest rate path. Markets are currently pricing in just over 50 bps worth of Fed easing by December," he added.

Harshal Dasani, Business Head at INVasset PMS, said, "Silver has finally stepped out of gold’s shadow, commanding attention on the back of global volatility and surging industrial demand...as supply constraints and geopolitical concerns sent safe-haven assets into overdrive. What's unique this time is that the rally isn't driven by retail investors or jewellery demand—it's largely a structural re-rating."

"Silver isn’t following gold anymore—it’s leading. And this time, its shine comes from utility, not just tradition," he added.

Dasani however cautioned investors about gold. "Unlike silver, gold may not see explosive moves in the near term. It is transitioning into a slower, more stable accumulation phase. The wild swings are behind us—for now...In the longer term, gold continues to be a strategic asset in portfolios. As the global economic cycle softens and real yields compress, gold is expected to gradually trend higher. For investors, this is a phase to stay patient, stay allocated, and let the macro tailwinds play out," he said.

Hindustan Zinc is the largest producer of silver in India, and produces refined silver with a minimum 99.9 percent purity. The sharp rise in the bullion's prices is expected to further boost the stock.

Despite today's gains, the shares of the company have dropped nearly 16 percent in the past one month. This was fuelled after American short-seller Viceroy Research levelled strong allegations against Vedanta Resources, calling it a 'Ponzi scheme' and 'Parasite holding company'. The group's management has strongly denied the claims. JPMorgan meanwhile said investors shouldn't get distracted by the allegations.

For Hindustan Zinc, the international brokerage had said that the Indian government continues to maintain an active presence on its board, Mint reported. It added that government oversight continues to be effective, especially concerning capex planning.

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