Gold prices tumbled by Rs 14,000 per 10 grams, while silver dropped Rs 20,000 per kilogram in the national capital on Friday amid heavy profit-taking and a stronger US dollar. Investors liquidated positions after a record-breaking rally in both metals.
Gold of 99.9 per cent purity declined 7.65 per cent to Rs 1,69,000 per 10 grams, inclusive of taxes, following Thursday’s all-time high of Rs 1,83,000. Silver fell nearly 5 per cent to Rs 3,84,500 per kilogram, after touching a record Rs 4,04,500 in the previous session.
“Gold and silver experienced a significant correction on Friday as investors moved to aggressively book profits following a recent record-breaking rally,” said Saumil Gandhi, Senior Analyst, Commodities, HDFC Securities. He added that recovery in the US dollar further pressured bullion.
“From a technical standpoint, both gold and silver had been trading in overbought territory over the past several sessions, heightening the risk of a corrective move. Stretched technical conditions, institutional profit-taking, and a recovering US dollar are likely to keep bullion under pressure in the short term,” Gandhi said.
In the international market, spot gold was down 5.31 per cent, or USD 285.30, at USD 5,087.73 per ounce, having fallen as much as USD 425.86 to USD 4,945.26 intraday. Spot silver dropped 12.09 per cent to USD 101.47 per ounce after falling to USD 95.26 intraday, following a Thursday peak of USD 121.45.
“A few factors contributed to the sharp correction. After the vertical surge in prices, global profit booking intensified. No support prices were established at these levels, so the correction was steep,” said Vijay Kuppa, Chief Executive Officer, InCred Money.
Market uncertainty was also driven by US President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve head, which raised expectations of a potentially hawkish monetary stance. “The US Treasuries and Dollar index showed a slight up move, which is generally negative for metals,” Kuppa added.
The combined impact of profit-taking, technical overbought conditions, and a stronger US dollar triggered one of the steepest daily corrections in the Indian bullion market in recent months.
Also read: Precious metal prices to remain elevated, says survey report
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