After 10 days of decline, silver prices rose on Wednesday by $12,861 to approx $2.36 lakh per kg in futures trading. This rise came with the weakness of the US dollar and the easing of concerns about inflation due to the decline in crude oil prices.
On the multi-commodity exchange, silver rose $12861, approximately six per cent, l $2,36,802 for May delivery.
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What is the reason for the rise in silver prices?
Analysts attributed this recovery to strong positive sentiment in global precious metals markets and the weakness of the US dollar, news agency PTI reported.
“The sharp recovery in silver on Wednesday was driven by the decline in the US dollar and easing concerns about inflation with the correction in crude oil prices,” the agency quoted Harish V, head of commodities research at Geojit Investments Limited, as saying.
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He added that what also supported the white metal was the decline in energy prices, which helped alleviate concerns about rising global interest rates.
Harish also said that the other reason behind the rise in silver prices was also the buying of the metal after the recent decline in prices which attracted fresh demand along with short covering, the report said.
Silver prices were also on the rise in the global market, with May futures rising $3.87 (about 5.6%) to $73.44 per ounce.
This rise of more than 3 percent globally came amid weakness in the US dollar as the US calls for a month-long ceasefire in its ongoing conflict with Iran to facilitate negotiations, said Amer Makda, commodity and currency analyst at Choice Broking.
According to Harish, while supportive geopolitics could support sentiment, “a stronger US dollar is likely to cap the strong upside, keeping price movements relatively restrained for the time being.”
