Gold prices witnessed a sharp decline in the national capital, Delhi, on Thursday. According to the All India Sarafa Association, the price of gold with 99.9 percent purity plummeted by ₹1400 in a single day, reaching ₹99620 per 10 grams. On Wednesday, its price was ₹101020 per 10 grams. Similarly, the price of gold with 99.5 percent purity decreased by ₹1200 to ₹99250 per 10 grams.
Sharp Fall in Silver Prices Too
Silver prices also experienced a significant drop on Thursday. Silver, which was priced at ₹118000 per kilogram on Wednesday, fell by ₹3000 to reach ₹115000 per kilogram on Thursday. This sharp decline has surprised investors.
Profit Booking and Global Pressure Spoiled the Situation
Experts say that there are two main reasons behind this decline. First, profit booking by stockists in the domestic market, and second, weak signals in international markets. Gold and silver prices have been steadily increasing for some time, so traders have started booking profits.
Focus on US Economic Data
Investors are keeping an eye on the unemployment figures and the S&P Global Flash PMI report coming from the US. These figures will indicate the direction of the US economy and what decision the Federal Reserve may take in the next monetary policy meeting. That is why investors have become cautious for the time being.
Slight Support from Dollar's Movement
However, the weakness of the dollar has given some support to gold. When the dollar falls, gold usually becomes cheaper, which slightly increases its demand. But in the current circumstances, this support has not been very effective.
Opinion of Market Experts
Pranav Mer, Vice President of Commodity Research at JM Financial Services, said that the new trade agreement between Japan, the US, and the Philippines has reduced risk at the global level. This has directly impacted the demand for gold.
Meanwhile, Jatin Trivedi, Analyst at LKP Securities, said that the ongoing discussions about tariffs in the past few weeks had supported gold prices, but now that there is some clarity in these discussions, investors' interest is shifting away from gold.
State of Spot Silver
The price of silver also declined in the global market. Spot silver fell by about 0.53 percent to $39.05 per ounce. This also indicates that investors are moving away from safe investments to other assets.
Eye on European Markets Too
Not only the US, but European investors are also keeping an eye on the central bank's next rate policy. Any change in interest rates by the European Central Bank can create volatility in the currency market. This can also affect the prices of gold and silver.
Why Such a Decline in Just a Few Days?
In the past few weeks, gold prices had set many records. Sometimes it had crossed ₹101000 per 10 grams, and sometimes silver had touched the figure of ₹118000 per kilogram. After reaching these high levels, investors have now started booking profits, due to which a sharp decline in prices has been recorded.
Impact Not Just in Delhi, But in Other Cities Too
Apart from Delhi, a fall in gold and silver prices was also seen in major cities like Mumbai, Ahmedabad, Lucknow, and Kolkata. While buyers are seeing this fall as an opportunity, jewelers are currently taking a cautious approach.
Will the Price Fall Further?
Currently, the market trend indicates that till the economic data of the US and other major countries becomes clear, volatility in gold and silver prices will continue. Investors are cautious and are waiting for international signals.
