Gold, silver prices continue to decline! Gold and silver prices have been crashing in the last two trading sessions, plunging drastically from record highs, raising questions about whether the bull run is over and if the volatility is here to stay.
Silver prices have dropped by 26,273 per kg, or 9%, dragging the metal down to around Rs 2.65 lakh per kg, while gold slipped about 3% to Rs 1.47 lakh per 10 grams. Sharp drops were seen in gold and silver prices in trading during Sunday’s special session as investors continued to book profits after the recent surge to record levels.
Silver Prices in Free Fall
On the Multi Commodity Exchange (MCX), silver futures for March delivery crashed by Rs 26,273, hitting the lower circuit limit and settling at Rs 2,65,652 per kg. In the previous trading session, the metal had already suffered a steep fall of Rs 1,07,968, or 27%, closing at Rs 2,91,925 per kg, where it had also touched the lower circuit.
Over the last two sessions, silver has declined by a cumulative Rs 1,34,241, translating into a fall of 33.6%. On a weekly basis, the metal has dropped by nearly 21%, or Rs 69,047, from its level of Rs 3,34,699 per kg recorded on January 23.
Gold Remains Volatile
Gold futures also remained highly volatile during Sunday’s trade. The April contract initially slid as much as 9% to Rs 1,38,634 per 10 grams, hitting the lower circuit on the MCX in early deals. Prices later recovered part of the losses to settle at Rs 1,48,104 per 10 grams, still down Rs 4,241, or 3%, for the day.
In the previous session on Friday, gold had plunged Rs 31,617, or 17.2%, to Rs 1,52,345 per 10 grams, after touching a record high of Rs 1,93,096 per 10 grams on Thursday.
Commenting on the sharp correction, Pranav Mer, Vice President, EBG – Commodity & Currency Research at JM Financial Services Ltd, said, “Overspeeding leads to a crash and that's what we saw in Bullion prices.”
“Gold has declined about 20%, while silver has fallen nearly 37% from their respective record highs in the domestic market, with selling pressure continuing on Sunday,” he added.
Global futures markets were shut on Sunday due to a holiday, but the previous session saw sharper losses in international bullion markets compared with domestic ones. On Friday, Comex gold futures for April delivery slid by $612, or 11.39%, to settle at $4,763.10 per ounce, after touching a new lifetime high of $5,626.8 per ounce on Thursday.
Silver futures on the Comex, for March delivery, also witnessed a steep fall, plunging $35.89, or 31.37%, to close at $78.53 per ounce on Friday, after having scaled a record high of $121.78 per ounce a day earlier.
Market analysts attributed the sharp correction in bullion prices to a firmer US dollar, following comments by Federal Reserve Chair Jerome Powell that suggested interest rate cuts were unlikely in the near term.
Adding to the developments, US President Donald Trump named former Federal Reserve Governor Kevin Warsh as his nominee for the next Fed Chair. Warsh has traditionally been viewed as a monetary policy hawk, favouring higher real interest rates and a restrained balance sheet. However, analysts noted that he has recently shown greater alignment with Trump’s preference for lower borrowing costs, which may have influenced his nomination.
“Profit booking and long liquidation were also evident ahead of the near-month futures expiry in both international and domestic markets,” Mer said, adding that global commodity exchanges have raised margin requirements for gold and silver, a move that could increase price volatility.
Looking ahead, he said, “We may see more corrective moves in the next couple of trading sessions, after which prices may see some recovery and consolidate.”
(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)