Shares of metal producers such as Hindustan Zinc, NALCO, and Vedanta remained firmly in focus after silver prices witnessed a sharp selloff, extending losses by another 15% in global markets. The steep decline in silver added fresh volatility to the broader metals space, keeping investors cautious across mining and commodity-linked stocks.
Silver plunged as much as 14% to around $76 an ounce on Thursday, snapping a brief two-day rebound. The renewed fall suggests that selling pressure in precious metals is far from over, with the recent bounce failing to attract sustained buying interest. Market participants had expected dip buyers to emerge at lower levels, but the momentum instead turned decisively negative.
The weakness in silver coincided with a stronger US dollar, which typically weighs on commodity prices. The dollar’s rise was supported by hawkish signals from the Federal Reserve, as investors reassessed expectations around the timing and pace of interest rate cuts. Hopes of aggressive monetary easing have faded, putting pressure on non-yielding assets such as silver and gold.
Investor sentiment was also influenced by discussions around Kevin Warsh being considered for the role of Fed chair. Warsh is widely viewed as favouring a smaller Federal Reserve balance sheet and a more cautious approach to rate reductions, reinforcing the outlook for tighter financial conditions for longer. This stance further dampened appetite for precious metals.
Adding to the pressure, geopolitical tensions showed signs of easing after the United States and Iran scheduled a fresh round of talks. While uncertainty remains over the scope of discussions, any reduction in geopolitical risk tends to curb safe-haven demand for metals like silver.