Silver Price Skyrockets Past ₹4 Lakh Threshold on MCX
In a remarkable surge, silver prices in India catapulted beyond the psychological ₹4 lakh mark on Thursday, January 29, registering a sharp 4% increase. The rally propelled the precious metal to a fresh all-time high of ₹4,00,780 on the Multi Commodity Exchange (MCX), as escalating geopolitical uncertainties and supportive global cues amplified demand for safe-haven assets.
Geopolitical Tensions and Federal Reserve Policy Fuel Rally
The dramatic upswing in silver prices unfolded against a backdrop of heightened geopolitical risks, particularly concerning US-Iran relations. Reports emerged of former US President Donald Trump threatening military action against Iran, which significantly bolstered investor appetite for precious metals as a hedge against instability. Concurrently, the US Federal Reserve maintained its interest rates unchanged during its Wednesday meeting, aligning with market anticipations. Fed Chair Jerome Powell underscored that inflation in December remained substantially above the central bank's 2% target, a stance that further supported the precious metals complex.
Global Silver Market Nears $120 Per Ounce Milestone
Internationally, silver prices ascended towards the $120-per-ounce landmark, reflecting robust global momentum. Spot silver climbed 1.1% to $117.87 an ounce, after briefly touching a record peak of $119.34 earlier in the trading session. This surge has contributed to an impressive year-to-date gain exceeding 60% for the white metal. The rally is underpinned by several factors: strong investor demand for silver as a more affordable alternative to gold, persistent supply constraints within the mining sector, and momentum-driven buying from institutional and retail investors alike.
Broader Precious Metals Complex Joins the Rally
The safe-haven rally extended across the precious metals spectrum, lifting gold to unprecedented record levels as well. A softer US dollar, fueled by speculation that the US administration is comfortable with a weaker currency, provided additional tailwinds for the surge. In domestic markets, gold prices witnessed a substantial jump, crossing the $5,588.71 threshold and marking a year-to-date increase of over 27%, following an extraordinary 64% gain in the preceding year. Spot gold surged 2.7% to $5,542.29 an ounce, after achieving a record high of $5,591.61 earlier in the day.
Other Precious Metals Show Mixed Performance
Among other precious metals, spot platinum rose 1% to $2,723.40 an ounce, though it remained below the record high of $2,918.80 reached earlier in the week. In contrast, palladium experienced a decline, slipping 1.6% to $2,041.20 an ounce, indicating selective investor movements within the sector.
Escalating US-Iran Tensions Underpin Market Sentiment
The geopolitical catalyst for the rally stems from renewed tensions between the United States and Iran. US President Donald Trump on Wednesday urged Iran to reopen negotiations concerning its nuclear program, cautioning that any future US military action would be considerably more severe if Tehran declined to engage. His statements coincided with reports of increased US military deployments in the Middle East region. Trump, who withdrew the US from the 2015 nuclear accord during his initial term, referenced his prior warnings to Iran, which were followed by military strikes earlier in the year. He emphasized that time is dwindling for diplomatic resolutions and pressed Iran to agree to a deal that unequivocally prohibits nuclear weapons.
Iran responded with forceful warnings of its own. Ali Shamkhani, an adviser to Supreme Leader Ayatollah Ali Khamenei, asserted that any US military action would provoke retaliation against the United States, Israel, and their allies. Foreign Minister Abbas Araqchi reinforced that Iran's armed forces are fully prepared to counter any aggression, while reiterating Tehran's openness to a fair nuclear agreement devoid of coercion.
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