Silver soars to Rs 2.79L/kg as weak dollar boosts demand

New Delhi: Silver prices surged by Rs 10,975 to Rs 2.79 lakh per kilogram in the national capital on Tuesday, while gold rose Rs 400, tracking strong global trends as a weak US dollar boosted demand for the safe-haven asset.

Ending its three-day losing streak, the white metal soared by Rs 10,975, or 4.09 per cent, to Rs 2,79,275 per kg (inclusive of all taxes) from Monday’s closing level of Rs 2,68,300 per kg, as per the All India Sarafa Association.

Gold prices also moved higher, with the metal having 99.9 per cent purity rising by Rs 400, or 0.24 per cent, to Rs 1,64,700 per 10 grams (inclusive of all taxes).

In the international markets, spot silver gained $1.38, or 1.6 per cent, to $88.33 per ounce, while gold was trading nearly 1 per cent higher at $5,172.86 per ounce.

“Gold and silver rebounded on Tuesday as a pullback in the US dollar and Treasury yields provided relief to precious metals,” Saumil Gandhi, Senior Analyst - Commodities at HDFC Securities, said.

The dollar index retreated after touching a 15-week high in the previous session, while US Treasury bond yields also edged lower, creating room for bullion prices to recover, Gandhi added.

Echoing similar views, Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said silver gained to trade around $90 per ounce after Trump suggested that the Gulf conflict could end soon, easing inflation concerns, following the sharp correction in oil prices.

The dollar had initially strengthened when crude oil briefly surged toward $119 per barrel, a move seen as potentially inflationary and supportive of a more hawkish policy stance from the Federal Reserve.

However, the sharp pullback in crude prices later in the session helped precious metals rebound from their earlier lows. “Gold was also supported by continued central bank demand, with the People’s Bank of China extending its gold reserve purchases for a sixteenth consecutive month in February,” Chainwala said.