Try below code
var youtubeplayer = iframe.getElementById('ytplayer');
youtubeplayer .setVolume(0);
And below is your fiddle updated version,
NOTE: Must include enablejsapi=1 in video url
var tag = document.createElement('script');
tag.src = "//www.youtube.com/iframe_api";
var firstScriptTag = document.getElementsByTagName('script')[0];
firstScriptTag.parentNode.insertBefore(tag, firstScriptTag);
var player;
function onYouTubeIframeAPIReady() {
player = new YT.Player('ytplayer', {
events: {
'onReady': onPlayerReady,
'onStateChange': onPlayerStateChange
}
});
}
function onPlayerReady(event) {
player.playVideo();
// Mute?!
//player.mute(); instead of this use below
event.target.mute();
//player.setVolume(0);
}
DEMO
Hope this helps...