Silver Price Fluctuations: Rise on MCX Versus Decline in Domestic Market

A continuous decline in the prices of gold and silver has been observed during the festive season. A significant drop in the prices of precious metals occurred both on the Multi Commodity Exchange (MCX) and in the domestic market. In just four days of trading, the silver bubble burst, and the price in the domestic market fell by more than 16,000 rupees. On MCX, silver is now selling for approximately 2.24 lakh rupees less than its peak level.

Simultaneously, gold prices also sharply decreased.

First, let's look at the changes in the cost of silver in markets across the country, including Delhi. Before Diwali and Gangaur, silver depreciated significantly, and its price dropped below 2 lakh rupees per kilogram. According to data from the Indian Bullion Jewelers Association (IBJA.Com), the price of silver in the domestic market was 2,10,918 rupees on October 16, and this Friday it fell to 1,94,415 rupees, which represents a drop of 16,503 rupees for silver per kilogram.

Silver plummeted not only in domestic markets but also in futures trading. Silver for 1 kg with an expiry date of December 4, which cost 2,11,187 rupees on MCX on October 16, fell to 1,96,100 rupees this Friday. Thus, over four days, silver became cheaper by 15,087 rupees per kilogram in the futures market.

Due to the significant decrease in silver prices this week, this precious metal is now available at a price less than half of its historical high of 4,20,048 rupees, reached at the end of January this year. Compared to the current price, the price of 1 kg of silver has fallen by 2,23,948 rupees from the peak.

After the fall in silver prices, let's examine the decrease in the cost of gold. This precious yellow metal also experienced a sharp drop this week. According to MCX Gold Rate data, gold with a December 4 expiry weight of 10 grams became 5,768 rupees cheaper, falling from 1,47,918 rupees to 1,42,150 rupees. Furthermore, according to IBJA, the price dropped by 4,796 rupees per 10 grams in the domestic market, falling from 1,46,426 rupees to 1,41,630 rupees.

When purchasing jewelry, it should be noted that in addition to the applicable GST, the buyer must pay a manufacturing fee, which can vary across different states and cities, thereby increasing the final cost of gold.

A significant decline was observed in the prices of both gold and silver on Wednesday. On the Multi Commodity Exchange (MCX), the futures price for silver suddenly plummeted, making it considerably cheaper than its historical high. Simultaneously, the value of precious gold also fell.

On MCX, the futures price for silver dropped by more than 2800 rupees per kilogram. During trading on Tuesday evening, the futures price for silver expiring on December 4 closed at 211,485 rupees, but about two hours after the start of trading on Wednesday, it decreased to 208,601 rupees, corresponding to a drop of 2884 rupees per kilogram.

Following this major slump on the third working day of the week, silver became substantially cheaper than its record level. In January of this year, the MCX Silver Price first exceeded the 400,000 rupee mark, reaching a peak of 420,048 rupees per kilogram; from this point, it has fallen to 211,447 rupees per kilogram.

The price decrease affected not only the MCX futures market but also the domestic market. According to data published on the Indian Bullion Jewelers Association (IBJA.Com) website, on October 19, silver closed at 208,750 rupees, while on Wednesday it opened at 205,850 rupees, indicating a decrease of 2900 rupees. Compared to the last working day of last week, the price fell by 5068 rupees per kilogram over two days, compared to the closing price of 210,918 rupees on October 16.

In addition to silver, futures prices for gold also showed a downward trend. Although the daily trading session on MCX was closed on Wednesday in observance of Ram Day, in the evening session, the price of 24-carat gold for 10 grams closed at 146,519 rupees on Tuesday, and on Wednesday it decreased to 145,689 rupees. Thus, futures gold expiring on December 4 became cheaper by 830 rupees per 10 grams.

A fall in the value of gold was also recorded in the domestic market. According to IBJA, on Monday, 24-carat gold closed at 145,944 rupees, and on Wednesday, immediately after the market opened, the price dropped to 144,060 rupees, representing a decrease of 1884 rupees. Prices for other types of gold also declined: 22-carat gold cost 143,483 rupees for 10 grams, 20-carat gold cost 131,959 rupees for 10 grams, 18-carat gold cost 108,045 rupees for 10 grams, and 14-carat gold cost 84,275 rupees for 10 grams.