Silver ETFs, Hindustan Zinc Slide As Precious Metal Prices Retreat

Silver-focused exchange-traded funds (ETFs) and metal stocks witnessed sharp selling pressure on Friday after global silver prices fell amid renewed concerns over inflation and interest rate expectations in the U.S.

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Tata Silver ETF, Nippon India Silver ETF and HDFC Silver ETF declined between 6% and 7% during the trading session.

Shares of Hindustan Zinc also fell nearly 5% as weakness in silver prices weighed on sentiment across the metals segment.

On the Multi Commodity Exchange (MCX), the actively traded July silver contract declined 5.4% to ₹2,75,100 per kilogram at around 12:21 pm. On the COMEX, the July silver contract was down 7.6% at $78.81 per ounce.

Spot silver prices dropped 5.9% to $78.53 per ounce in international markets. Platinum declined 2.4% to $2,006.03 per ounce, while palladium slipped 0.7% to $1,426.86.

Gold Extends Weekly Losses

Gold prices also remained under pressure, extending losses for a fourth consecutive session.

Spot gold fell 1.5% to $4,579.19 per ounce by 0631 GMT, marking its lowest level since May 6. The metal has declined nearly 3% during the week.

U.S. gold futures for June delivery were down 2.2% at $4,582.60 per ounce.

The decline in precious metals followed a rise in U.S. Treasury yields and a stronger dollar after inflation data from the U.S. pointed to persistent price pressures.

According to economic data released in the U.S., wholesale inflation accelerated in April to its fastest pace since 2022, while consumer inflation recorded its biggest increase since 2023.

The dollar index strengthened 0.3%, while two-year U.S. Treasury yields rose to their highest level in 14 months.

Rate Expectations Weigh On Precious Metals

Higher interest rate expectations typically reduce demand for non-yielding assets such as gold and silver.

New York Federal Reserve President John Williams stated on Thursday, according to Reuters, that the U.S. central bank currently does not see an immediate need to change interest rate policy despite uncertainties linked to the West Asia conflict.

Silver was last seen rallying sharply owing to rising demand and fear of any disruption to supplies in the wake of escalating geopolitical events.

Silver briefly touched levels above $90 per ounce during its rally earlier in this week before turning south on profit-taking.

Energy Crisis Increases Inflation Fears

The energy market was seen being volatile following the disruptions in the Strait of Hormuz area, which is one of the major oil shipment routes.

Crude oil futures stayed above $100 per barrel on both NYMEX and ICE platforms owing to fears of restricted tanker passage in the region.

According to Dow Jones data cited in reports, average daily movement of oil and gas tankers through the Strait of Hormuz declined to 2.6 vessels in May, compared with nearly 50 vessels per day in February.

Elevated crude oil prices have added to concerns around global inflation, strengthening expectations that interest rates may remain high for longer, which in turn pressured precious metals and related investment products.