MCX silver plunges 11% to ₹2.39 lakh/kg; tumbles 13% in global markets as geopolitical uncertainty eases

At around 10:40 pm, the white metal contract was trading 8.65% lower at ₹2,45,593 per kilogram.

In the international market, Comex silver contracts (March expiry) tumbled 13% to the session’s low of $73.415 per ounce, as geopolitical tensions eased and the dollar strengthened.

Gold prices also declined, with the yellow metal futures for the April expiry declining as much as 3% to an intraday low of ₹1,48,455 per 10 grams on the MCX. Globally, Comex gold also fell 3% to $4,805 per ounce.

At the time of writing, the safe-haven metal futures stood at ₹1,50,821 per 10 grams, down by 1.45%.

Why are silver, gold prices falling?

The precious metal prices fell across the board amid profit booking, as the US and Iran are set to hold nuclear talks in Oman on Friday, February 6.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.18% higher at 97.79.

Traders were also on the lookout for the ADP private-sector employment, which is an independent report of the US labor market based on the weekly payroll data of over 26 million private-sector employees. It showed that the private sector added 22,000 jobs in January, which was below expectations.

The employment data provides direction and insight into the probability of a Federal Reserve rate cut.

As per the CME Group’s Fed watch, there is an 88% probability that the Fed will opt for a 350-375 basis points (bps) rate cut at the next Federal Open Market Committee (FOMC) meeting in March.