Gold and silver prices took a dramatic tumble in the national capital on Friday, leaving investors and traders stunned. With gold slipping below the critical ₹80,000 mark and silver registering its biggest single-day fall this December, the bullion market witnessed heightened activity. According to the All India Sarafa Association, heavy selling by jewellers and stockists, coupled with a weak global trend, drove this sharp decline.
Gold Prices Dive Below ₹80,000
Gold of 99.9% purity fell by ₹1,400, closing at ₹79,500 per 10 grams, compared to ₹80,900 in the previous session. Similarly, gold of 99.5% purity declined to ₹79,100 per 10 grams, marking a steep fall from its prior close of ₹80,500.
Silver Suffers Largest Drop in December
Silver prices plummeted by ₹4,200, settling at ₹92,800 per kilogram from Thursday’s close of ₹97,000. This marks the largest single-day drop in December, raising concerns across the bullion trade.
Global Trends Weigh on Bullion Prices
Weak international market cues added to the pressure on gold and silver. On the Multi Commodity Exchange (MCX), gold futures for February delivery dropped by ₹539, or 0.69%, to ₹77,430 per 10 grams.
Jateen Trivedi, VP Research Analyst at LKP Securities, explained the sharp sell-off:
“Mixed US economic data, such as a lower Producer Price Index (PPI) and higher weekly jobless claims, caused gold investors to book profits.”. This pushed international prices to $2,670 per ounce on Comex.”
The outlook for gold remains cautious, with MCX prices expected to trade within the range of ₹76,000–₹78,000 amid continued market volatility.
Silver futures for March delivery also went down by ₹1,104, or 1.19%, from ₹92,633 per kilogram to ₹91,529 per kilogram. On Comex, silver traded 1.42% lower at $31.17 per ounce.
Profit-Booking and Dollar Recovery Add to the Pressure
Gold prices also faced pressure from a recovering US dollar, as traders booked profits ahead of the Federal Reserve’s final policy meeting of the year.
Senior Analyst for Commodities at HDFC Securities Saumil Gandhi said:
“Gold prices dipped as the market reacted to mixed US data and speculation about the Fed’s next move. While traders are expecting a 25-basis-point interest rate cut next week, the monetary policy path for 2025 remains uncertain.”
Markets also anticipate that the Federal Reserve may pause rate hikes in January 2025, with a more cautious stance likely next year.
Year-End Adjustments Could Limit Upside
Maneesh Sharma, AVP of Commodities & Currencies at Anand Rathi Shares and Stock Brokers, highlighted that year-end position adjustments by traders, along with upcoming rate decisions in Japan and England, could cap any sharp rise in gold and silver prices.
Outlook: Brace for Volatility
As 2024 draws to a close, gold and silver remain under pressure amid profit-booking, economic data fluctuations, and global market uncertainty. For investors, the focus now shifts to central bank decisions and global trends, with caution being the need of the hour.
This significant drop in bullion prices is a clear signal for traders and investors to stay vigilant as the market continues to evolve. Will the new year bring relief or further challenges for the precious metals market? Only time will tell!
