Gold and Silver Prices Drop Sharply — Experts Predict Further Decline Ahead
The prices of gold and silver have witnessed a significant drop recently, causing concern among investors and traders. On Tuesday, both precious metals saw a steep fall in value on the Multi-Commodity Exchange (MCX). The decline was primarily driven by weakness in the global market, expectations of easing trade tensions between the United States and China, and a stronger U.S. dollar. These combined factors have led to a sharp sell-off in both metals after months of steady gains.
MCX Prices Fall Sharply
On Tuesday, gold prices on the MCX dropped by 0.7%, opening at ₹1,20,106 per 10 grams. Silver followed a similar trend, slipping 0.69% to start trading at ₹1,42,366 per kilogram. By the time markets closed, gold had fallen by 2.06% to ₹1,18,461 per 10 grams, while silver settled 1.36% lower at ₹1,41,424 per kilogram.
However, analysts note that prices have seen a slight rebound today, suggesting that the market is attempting to stabilize after the sharp fall.
Gold and Silver Prices in Kolkata
In Kolkata, the current market prices reflect the nationwide downward trend.
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24-carat gold is priced at ₹12,158 per gram
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22-carat gold at ₹11,145 per gram
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18-carat gold at ₹9,119 per gram
Meanwhile, silver is trading at ₹152 per gram, or ₹1,52,000 per kilogram. This shows a noticeable correction compared to the record highs earlier this year.
Far Below Record Highs
According to MCX data, gold’s previous record high stood at over ₹1.32 lakh per 10 grams, but it has now dropped to ₹1.18 lakh, marking a decline of more than ₹13,000.
Similarly, silver, which once hit a record ₹1.70 lakh per kilogram, is now down to ₹1.41 lakh, a drop of around ₹29,000. This correction reflects the combined impact of global sentiment, investor profit-booking, and a stronger U.S. dollar.
Why Are Gold and Silver Prices Falling?
Experts believe that the fall has come after two months of strong upward momentum. Rahul Kalantri, Vice President (Commodities) at Mehta Equities Ltd., explained that heavy selling pressure emerged as both metals slipped below key psychological levels. Gold touched $4,000 per ounce, while silver fell to $47 per ounce.
He added that renewed optimism about trade negotiations between the U.S., China, and India, coupled with a stronger dollar index, contributed significantly to the decline. A stronger dollar typically makes gold and silver more expensive for buyers using other currencies, reducing global demand.
Another factor influencing the decline is the changing geopolitical landscape. With renewed discussions around peace in Gaza, global uncertainty is easing, leading investors to move away from safe-haven assets like gold. However, the depreciation of the Indian rupee has provided some cushion to domestic gold prices, preventing a steeper fall.
Kalantri further noted that globally, gold prices are currently fluctuating between $3,905–$3,940, with major resistance expected around $4,055–$4,100.
Central Banks in Focus
Investors are also keeping a close watch on central banks worldwide for cues on interest rate decisions. With recent soft inflation data, the U.S. Federal Reserve is expected to announce a 25 basis point rate cut soon. On the other hand, both the European Central Bank and the Bank of Japan are likely to maintain their existing policies.
If the Fed cuts rates, the dollar could weaken slightly, potentially supporting gold prices. However, if central banks adopt a more cautious approach, gold and silver may continue to face pressure in the near term.
Short-Term Outlook: More Declines Possible
Darshan Desai, CEO of Aspect Bullion and Refinery, stated that the short-term price trend will depend heavily on upcoming trade negotiations and monetary policy announcements. He added that optimism surrounding a potential U.S.-China trade deal and a strong dollar has weakened safe-haven demand, pushing gold prices down further.
Desai also cautioned that price fluctuations are likely to continue in the short run. If the Federal Reserve signals a smaller rate cut than markets expect, it could exert additional downward pressure on gold prices.
Conclusion
In summary, the decline in gold and silver prices is the result of a combination of global and domestic factors — including profit-taking by traders, strengthening of the U.S. dollar, easing geopolitical tensions, and expectations of central bank decisions. While short-term volatility is expected to continue, many analysts believe that the longer-term outlook will depend on how global economic conditions evolve in the coming weeks.