The unstoppable rally in the bullion market has finally hit a major roadblock. If you were planning to buy gold or silver and were worried about the skyrocketing prices, today's market update brings significant relief, while following a record-breaking streak until January 29, the morning of January 30 saw a bloodbath in the precious metals market as prices crashed on the Multi Commodity Exchange (MCX).
Gold Prices Retreat from Record Highs
In the early trading hours, both gold and silver witnessed a decline of over 5%. On the morning of January 30, gold prices on MCX tumbled by 5. 55%, reaching approximately 1,60,001 per 10 grams. This crash is particularly notable because gold had recently touched an all-time high of 1,93,096. Today's drop of nearly 9,402 per 10 grams has sent shockwaves through the investor community.
Silver Prices Witness Massive Sell-off
Silver followed suit with an even more dramatic decline. Prices fell by 4. 18%, sliding down to 3,83,177 per kg. Within a single day, silver became cheaper by a staggering 16,716, while just a day prior, silver had set a new record of 4,20,048 per kg, but the intense profit-booking at higher levels dragged the prices down Notably.
Retail Market Impact and Relief for Buyers
The impact of the crash wasn't limited to the futures market; the retail market also saw a cooling trend. For common buyers, this presents a strategic window for purchase. According to bullion website data, retail gold prices dropped by 5,300 to trade around 1,65,180 per 10 grams. Similarly, retail silver saw a massive dip of 23,360, trading at the 3,79,130 per kg level.
Why Did the Market Crash Today?
Market experts attribute this sudden crash to heavy profit booking. After a prolonged period of one-sided gains, investors decided to liquidate their positions to lock in profits, leading to a surge in supply. On top of that, global market movements exerted downward pressure. International spot gold fell 1, while 65% to 5,217 per ounce, down from its record high of 5,594. 82, while spot silver also slipped 2. 86% to 110 per ounce.
Expert Advice for Investors
Analysts suggest that while the current crash seems severe, it might be a temporary correction in a long-term bull market. Precious metals remain a preferred safe-haven asset amidst global geopolitical tensions, while for those looking to buy jewelry for the upcoming wedding season, this price correction is a golden opportunity. Experts recommend a 'buy on dips' strategy rather than catching a falling knife.
Future Outlook for Bullion
The future trajectory of gold and silver will depend heavily. On the US Federal Reserve's stance and upcoming global economic data. A strengthening US Dollar could further weigh down gold prices. However, domestic demand in India remains solid due to cultural factors and the wedding season, which might provide a floor to the falling prices in the medium term.
DISCLAIMER: This article is for informational purposes only. Please consult with a financial advisor before making any investment decisions. Gold and silver prices are subject to market risks.