Silver futures decline nearly 2% to Rs 2.4 lakh/kg on weak global cues

New Delhi: Silver prices declined nearly 2 per cent to Rs 2.4 lakh per kilogram in the futures trade on Monday, tracking weak global trends and subdued demand in the domestic spot markets.

On the Multi Commodity Exchange (MCX), the white metal for March delivery plunged Rs 3,630, or 1.49 per cent, to Rs 2,40,730 per kilogram in a business turnover of 5,803 lots.

In the international markets, Comex silver futures for March contract were trading 1.45 per cent lower at USD 76.83 per ounce in New York.

Silver fell more than 1 per cent toward USD 76 per ounce, reversing gains from the previous session, as trading volumes remained thin due to market holidays in the US, China and several other countries, Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said.

On Friday, the white metal had jumped nearly 3 per cent after soft US inflation data reinforced expectations that the Federal Reserve would begin cutting interest rates later this year.

Market participants are currently pricing in a rate cut in July, with a strong probability of a move in June. Investors are now awaiting the release of the Fed's latest meeting minutes and the core Personal Consumption Expenditures (PCE) price index report for further direction on the monetary policy, Trivedi added.

Meanwhile, mainland China's markets remained closed this week for the Lunar New Year holidays. Trivedi noted that Chinese traders had driven a speculative rally in precious metals in recent weeks, prompting authorities to curb market risks through various measures.

"Silver peaked above USD 120 an ounce in late January before dropping sharply to around USD 64 earlier this month as sentiment reversed," he said adding that MCX silver prices may drop to Rs 2.35 lakh per kg amid a weak sentiment in the world markets.