Silver prices jump 4% as safe-haven demand returns, but still on track for 6% drop in Nov | Stock Market News

Silver prices staged a significant recovery in today’s trade, November 29, driven by heightened safe-haven demand amid escalating geopolitical risks. Renewed tensions between Israel and Hezbollah, just a day after a ceasefire agreement, along with Russia’s warnings of potential nuclear-capable ballistic missile strikes on Ukraine and a weaker U.S. dollar, have fueled the upward momentum in silver prices.

On the Multi Commodity Exchange (MCX), silver prices soared by 4%, reaching ₹91,454 per kilo in intraday trading but witnessed profit booking at higher levels and were trading with a 1% gain at ₹89,029 per kilo as of 2:30 p.m.

Similarly, on COMEX, prices climbed back above $30.6 per ounce, touching $30.75. Despite this robust rebound, silver remains on track to close November with a decline of nearly 6%, which is the biggest monthly drop since December 2023.

For most of November, silver prices faced significant selling pressure after rallying strongly for two consecutive months. Easing tensions in the Middle East, economic uncertainties in China—the world’s largest silver consumer—and concerns over the potential negative impact of U.S. President-elect Donald Trump’s policies on the renewable energy sector weighed heavily on prices.

However, renewed geopolitical tensions have reignited safe-haven demand for silver. According to the latest media reports, Israel’s military launched an airstrike on a Hezbollah facility in southern Lebanon on Thursday, targeting a storage site for mid-range rockets, despite a ceasefire agreement that took effect just a day earlier. This move has sparked concerns about the fragility of the ceasefire, which aims to halt fighting for an initial two-month period.

Additionally, Russia on Thursday unleashed its second big attack on Ukraine’s energy infrastructure this month, the media reports showed. Silver prices have also drawn support from the latest U.S. economic data, which underscores the economy’s resilience, dampening expectations of a rate cut by the Federal Reserve in its December meeting.

The fading rate-cut hopes have triggered a sell-off in the dollar index, which slid below 106 in today’s session. The index is on track for a weekly decline of about 1.5%, its first in nine weeks.

Meanwhile, key U.S. data scheduled for next week, including job openings, the ADP employment report, and the employment report, could provide insights into the Fed’s rate cut trajectory and influence demand for precious metals.

Prices outperform gold despite sharp drop in Nov

Despite the sharp decline in November, silver prices are still trading 23.53% higher compared to the closing level of 2023. In contrast, gold prices have risen by 20.63% from their 2023 year-end levels.

Analysts expect the rally in silver prices to persist into 2025. As 5G technology expands and new technologies such as electric vehicles (EVs) advance, industrial demand for silver is anticipated to surge, potentially creating a supply deficit. This imbalance is expected to help keep silver prices elevated in the coming years.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.