Silver prices were range bound on Wednesday, March 18, as investors stayed cautious ahead of the US Federal Reserve’s rate decision later in the day, with inflation risks rising due to elevated oil prices amid the prolonged Middle East conflict. The US Federal Reserve is widely expected to keep interest rates unchanged, while markets remain focused on the central bank’s outlook on energy-driven inflation.
On MCX, Silver rate fell around 1.5% to ₹2,49,501 per kg while MCX gold price was down 0.5% to ₹1,55,200 per 10 gram.
In international markets, precious metals remained subdued. Spot silver declined 0.4% to $79 per ounce, while spot gold slipped 0.1% to $5,000.77 per ounce as of 0243 GMT. US gold futures for April delivery also eased 0.1% to $5,004.60 per ounce.
Among other metals, spot platinum dropped 0.3% to $2,118.70, while palladium remained steady at $1,601.63. Going ahead, the direction of precious metals is expected to hinge largely on the Federal Reserve’s forward guidance.
Silver, Gold: What’s driving the fall today?
Crude oil price movements and geopolitical tensions are shaping the direction of gold and silver prices ahead of the US Federal Reserve policy decision.
Oil prices held firm above $100 per barrel as Iranian attacks on the United Arab Emirates intensified concerns over global supply disruptions. The Strait of Hormuz, a key route for nearly a fifth of global oil shipments, remained largely shut, with Iran threatening to target tankers linked to the US and Israel.
The continued closure of the Strait has kept crude prices elevated, adding to inflationary pressures by increasing transportation and manufacturing costs. While such an environment typically supports gold as a hedge against inflation, a stronger dollar has limited the upside in bullion prices.
The ongoing energy supply crunch and persistently high crude prices have further dampened expectations of near-term rate cuts by the Federal Reserve and other major central banks, weighing on sentiment in precious metals.
Geopolitical tensions escalated further after Israel killed Ali Larijani, Iran’s security chief and the most senior figure targeted since the start of the US-Israel conflict. Reports also indicated that Iran’s new supreme leader rejected de-escalation proposals conveyed through intermediary nations.
Meanwhile, central banks in the UK, euro zone, Japan, Canada, Switzerland, and Sweden are also scheduled to hold policy meetings this week, marking their first gatherings since the onset of the Iran conflict, adding to global market uncertainty.
What’s next for the precious metals?
Renisha Chainani, Head – Research at Augmont noted that Gold and silver remain under pressure, hovering below key psychological levels of $5000 and $80 respectively, as investors stay cautious ahead of the Federal Reserve decision. Volatility in oil prices is complicating the inflation outlook, keeping real yields elevated and limiting upside in precious metals despite ongoing geopolitical risks.
Moreover, she added that the Fed is expected to maintain a pause, reinforcing a “wait-and-watch” approach amid sticky inflation and a softening labor market. Similar policy stances by ECB, BoE, and BoJ indicate a synchronized global pause. The key trigger for metals will be forward guidance—any dovish tilt could revive bullish momentum.
“Silver has also slipped below $80 (~ ₹255,000) and renewed break below $77 (~ ₹247,000) could trigger further profit-booking, dragging prices towards $70 (~ ₹230,000) in the near term,” she predicted
For the yellow metal, she said, Gold briefly broke the key $5000 (~ ₹157,000) support and short-term bias remain bearish with strong support seen around $4850 (~ ₹150,000).
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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