Gold and Silver Prices Tumble from Record Highs as Festive Glow Fades Amid Weak Global Cues

NEW DELHI: Gold and silver saw a significant correction this week, tumbling from their recent record highs and ending a nine-week rally as market dynamics shifted. The decline, triggered by a stronger US dollar, easing geopolitical tensions, and global price falls, prompted investors to book profits and recalibrate positions.

Sharp Decline in Domestic Markets

On the Multi Commodity Exchange (MCX), December gold futures plunged by Rs 3,557, or 2.80 per cent, closing at Rs 1,23,451 per 10 grams on Friday. Silver futures experienced an even steeper fall, with the December contract crashing Rs 9,134, or 5.83 per cent, to settle at Rs 1,47,470 per kg. This retreat followed gold’s all-time high of Rs 1,30,874 per 10 grams earlier in October.

Major cities across India, including Delhi, Mumbai, Chennai, and Kolkata, reflected similar price drops in both 24-carat and 22-carat gold, as well as silver, signalling widespread profit-taking in domestic bullion markets.

Global Factors Behind the Price Correction

Several international factors contributed to the sharp weakening of precious metal prices. Analysts pointed to profit-booking by investors after months of spectacular gains, with gold having surged more than 50% year-to-date. A stronger US dollar made dollar-denominated metals more expensive for foreign buyers, dampening demand.

In addition, easing geopolitical tensions—particularly the recent de-escalation in US-China trade relations—and optimism surrounding global economic recovery reduced the appeal of traditional safe havens like gold and silver. Anticipation of key Federal Reserve monetary policy meetings added to market caution.

Silver’s decline was more pronounced partly due to its dual role as both an investment and industrial metal, making it sensitive to reduced industrial demand from sectors like electronics and solar energy.

Outlook for Precious Metals

Market experts suggest that this price correction is a ‘healthy retracement’ rather than a trend reversal, with potential support levels expected near Rs 1,21,000-1,25,000 for gold and Rs 1,45,000-1,50,000 for silver. Such consolidations are typical after sharp rallies and may signal opportunities for investors to re-enter at more attractive valuations.

The post-festive season slowdown in India, including diminished buying during Dhanteras and Diwali, also tempered physical demand, reinforcing the price drops domestically.