Silver Prices Plunge by ₹27,000, Gold Rates Decline on MCX

The Indian commodity markets witnessed significant volatility on Thursday as precious metals faced intense selling pressure. After a two-session rally, gold and silver prices plummeted by up to 10 percent in futures trade, driven by weak international cues and a strong US Dollar. The Multi Commodity Exchange (MCX) saw a historic single-day drop in silver prices, reflecting the broader global trend where investors are recalibrating their positions based on macroeconomic shifts and central bank signals.

Domestic Market Trends: MCX Price Breakdown

On the Multi Commodity Exchange (MCX), silver for March delivery crashed by ₹26,850, or approximately 10 percent, to settle at ₹2,42,000 per kilogram. This follows a closing price of ₹2,68,850 per kilogram in the previous session. 51 percent, to reach ₹1,50,736 per 10 grams. The yellow metal had closed at ₹1,53,046 per 10 grams on Wednesday. The sharp correction has wiped out recent gains, highlighting the heightened sensitivity of the bullion market to global financial developments.

International Market Performance and Comex Data

The domestic price drop mirrored the sentiment in international markets. 55 US dollars per ounce. 38 US dollars per ounce, marking a decline of over 13 percent. 9 dollars per ounce. This comes after gold had briefly reclaimed the psychological 5000 US dollars mark in the preceding session, a level it failed to sustain amid the dollar's resurgence.

Analyst Insights on Economic Drivers

According to Renisha Chainani, Head of Research at Augmont, gold and silver have surrendered their recent gains, breaking a two-day winning streak. She noted that renewed selling pressure and increased volatility have returned to the markets. Jigar Trivedi, Senior Research Analyst at IndusInd Securities, attributed the sell-off to the Federal Reserve's hawkish stance, while he stated that expectations of a slower pace of interest rate cuts have bolstered the US Dollar. A stronger dollar typically makes dollar-denominated commodities more expensive for holders of other currencies, thereby dampening demand and triggering liquidations in the futures market.

Market Outlook

According to analysts, the downward pressure on silver and other industrial metals may persist as the recent rally lacked sustained support from fundamental buyers. The market remains focused on the Federal Reserve's future policy path and upcoming inflation data. While some expected buyers to emerge at lower levels, the strength of the US Dollar Index continues to be a significant headwind for precious metals. As global economic uncertainty persists, the bullion market is expected to remain in a phase of high volatility, with prices closely tracking geopolitical developments and currency fluctuations.