Silver prices sink on MCX: Drop 1.33% to Rs 1.45 lakh/kg; US-China trade deal hopes, strong dollar weigh on bullion

Silver prices fell sharply on Monday as hopes of a US-China trade deal and a stronger dollar reduced demand for safe-haven metals.On the Multi Commodity Exchange (MCX), silver futures for December delivery dropped by Rs 1,964, or 1.33 per cent, to Rs 1,45,506 per kilogram in a business turnover of 20,367 lots. The white metal had already fallen by Rs 9,134, or 5.83 per cent, over the past week.In the international market, comex silver futures for December delivery were down 1.44 per cent at USD 47.88 per ounce.After two days of talks in Malaysia, negotiators from the US and China reached a basic agreement on key issues such as export controls, fentanyl trafficking, and agricultural trade. The talks are expected to lead to a deal between US President Donald Trump and Chinese President Xi Jinping during their meeting in South Korea later this week.The dollar index, which shows the dollar’s strength against six major currencies, was slightly higher by 0.03 per cent at 98.98, putting more pressure on bullion prices.Gold also declined. On the MCX, gold futures for December delivery fell by Rs 1,546, or 1.25 per cent, to Rs 1,21,905 per 10 grams in a turnover of 12,428 lots.“Gold prices continue to decline as safe-haven demand weakens amid optimism over a potential US-China trade deal and a stronger US dollar,” Darshan Desai, CEO of Aspect Bullion & Refinery, said. Desai warned that investors buying gold as a hedge should be ready for short-term volatility and sharp price swings. Positive news on the trade deal or further gains in the US dollar could lead to more profit-taking in gold.