Silver Prices Tumble 6% on MCX as Global Factors Weigh Heavily
Silver rates experienced a sharp decline of 6% on the Multi Commodity Exchange (MCX) on Friday, February 6, extending losses for the second consecutive session. This downturn followed a brief rebound earlier in the week, which was completely erased by a combination of a stronger U.S. dollar and a widespread selloff in technology stocks across global markets.
Market Performance and Key Price Levels
During the trading session, silver prices on MCX fell as much as 6%, reaching a day's low of ₹2,29,187 per kilogram. This significant drop has placed the white metal on track for its second straight weekly decline, with losses approaching 16% over the past week. The deteriorating risk sentiment in international markets has been a primary driver of this downward pressure.
In parallel, MCX Gold also witnessed a decline, shedding approximately 2% to settle at ₹1,49,396 per 10 grams. The precious metals sector as a whole faced headwinds from unfavorable macroeconomic conditions.
International Market Dynamics
In global markets, spot silver showed relative stability at $71.32 per ounce after experiencing a dramatic plunge of 19.1% in the previous trading session. Earlier in the day, prices had slipped by as much as 10%, briefly falling below the $65 level to touch a low not seen in over one and a half months.
On a weekly basis, silver has declined nearly 16%, following an 18% slump the previous week. This represents the steepest weekly decline for silver since 2011, indicating severe market volatility and negative sentiment toward the commodity.
Dollar Strength and Commodity Impact
The U.S. dollar maintained its position near a two-week high and was poised to record its strongest weekly performance since November. This dollar strength has made dollar-denominated commodities, including silver, more expensive for holders of other currencies, further suppressing demand and prices.
Other Precious Metals Performance
While spot gold showed a modest increase of 0.4% to $4,790.80 per ounce by 0224 GMT, it remained down 1.4% for the week. U.S. gold futures for April delivery fell 1.7% to $4,806.50 per ounce, reflecting the broader challenges in the precious metals market.
Among other metals, spot platinum slid 4.7% to $1,892.74 per ounce. This decline comes after platinum had reached an all-time high of $2,918.80 on January 26, demonstrating the rapid reversal in fortune for precious metals. Palladium gained 0.8% to $1,628.95, though both metals were lower on a weekly basis, confirming the sector-wide weakness.
Market Context and Future Outlook
The simultaneous pressures from a strengthening U.S. dollar and the global technology stock rout have created a perfect storm for silver prices. Investors are closely monitoring whether current levels represent a buying opportunity or if further declines are imminent given the ongoing market uncertainties.
The combination of these factors suggests that silver and other precious metals may continue to face volatility in the near term as market participants assess the broader economic implications of dollar strength and equity market movements.
