Silver declined by Rs.1,500, the maximum this week, to Rs.54,700 a kg on Saturday. Silver prices reacted downwards at the domestic bullion market on hectic speculative and stockist sell-off impacted by bearish global sentiment.
Trading sentiments dampened after precious metals fell in global markets as lower energy costs eroded the appeal of the metals as a hedge against inflation.
Gold also declined on fresh stockist offering in a lacklustre activity on the back of poor local buying interest. In the overseas market, the precious metals slumped on stronger dollar and easing inflationary worries which dipped the investment demand. In New York, gold for August delivery moved down by $13.50 to $1,529.20 an ounce on the Comex division of the NYMEX on Friday. July silver also lost $1.10 to $36.33 an ounce.
A weak domestic market trend due to subdued demand at prevailing high levels also put pressure on the precious metals' prices.