Silver ETFs Drop Up To 13% As Silver Prices Fall 11% To ₹2.02 Lakh/Kg; Hindustan Zinc Down 5%

Silver exchange-traded funds (ETFs) declined sharply on March 23, falling up to 13% after silver prices dropped 11% to ₹2.02 lakh per kg on the Multi Commodity Exchange (MCX), according to Reuters.

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The fall in silver prices was reflected across financial instruments linked to the metal. The MCX May silver contract dropped 11%, while the COMEX May silver contract was down 11% at $62.3 per ounce.

ETFs And Stocks Track Price Decline

Silver ETFs recorded steep losses during the session. Nippon India Silver ETF fell 13.6% to ₹190, while Tata Silver ETF declined 12.85%, according to exchange data.

Shares of Hindustan Zinc, the country’s largest silver producer, dropped 5% to ₹488.95. Its parent company Vedanta also declined 4.6% during the session.

The Nifty Metal Index fell 4.5%, reflecting broader weakness in nifty metal stocks. Shares of Multi Commodity Exchange of India were also down 5.5% at ₹2,281.6.

Precious Metals Under Pressure

Gold prices also declined during the session. MCX gold futures for April delivery declined by 5% to reach ₹1,37,270 per 10 grams, while U.S. gold futures declined by 4.4% to $4,375.60, according to Reuters. Gold has declined by over 10% in the past week, touching its lowest point since January 2.

The fall in precious metals is due to the volatility in global markets caused by geopolitical tensions in West Asia and rising inflation concerns.

Global Factors Driving Movement

According to Reuters, due to the conflict in West Asia, the prices of crude oil are high, which has caused a rise in inflationary concerns. This has affected global interest rate expectations.

Higher interest rates tend to decrease the attractiveness of non-yielding assets like gold and silver. At the same time, liquidity-driven selling was seen in global commodities.

The Strait of Hormuz continues to face disruptions in global oil trade routes.

The sharp decline in silver prices and its associated financial instruments can be attributed to global commodities and the impact of global events.