Comex silver dips 3% to $86/oz on profit-booking; key cues when MCX reopens after Holi amid US-Israel-Iran tensions

• Silver fell 2.94 percent to $86.24/oz after recent rally
• Middle East tensions and strong dollar drive silver volatility
• Indian markets await post-Holi reaction to global silver moves

Did our AI summary help?

The international spot price of silver declined sharply during early trade on Comex after investors rushed to book profits after a massive rally induced by the US-Israel and Iran conflict.

The metal was trading 2.94 per cent down to $86.24 per ounce on March 3 after briefly surging past $90/oz. Silver reached its peak performance at $94 per ounce during the intraday trading on Monday.

Today's decline also follows the dollar's strength, which was trading at 91.917 against the rupee,  as of 12:49 pm IST. Investors in India closely await the market's reaction when trading opens after Holi.

The domestic futures price of silver closed the Monday session below 0.9 percent at Rs 2,80,090 per kilogram. The Indian Bullion Jewellers Association (IBJA) pegged the standard price of gold at Rs 1,67,471 per 10 grams, and silver at Rs 2,89,848 per kilogram at yesterday's evening trade.

Middle East tensions keep silver on edge; volatility likely

“Silver is likely to open with increased volatility after Holi, as markets remain sensitive to the US-Israel-Iran conflict as well as normal market drivers,” said Ross Maxwell, Global Strategy Operations Lead, VT Markets.

Heightened geopolitical tensions typically increase safe-haven demand for precious metals, and silver may benefit from risk-off flows if the threat of escalation remains.

Crude oil prices, on the other hand, are facing a major threat from the war-like escalation in West Asia, as any disruption to Middle East energy supply routes would lift crude oil prices, heightening inflation worries and indirectly supporting silver as an inflation hedge.

Maxwell believes that gains may be contained if the US dollar strengthens sharply amid global uncertainty. “A stronger USD can put pressure on metal prices in the short term. Industrial demand remains a supportive medium-term factor, but near-term direction will be driven largely by headlines related to the conflict and broader risk sentiment.”

The analyst suggests that traders be prepared for high volatility and price swings driven by geopolitical headlines and currency movements.