Ahead of the Dhanteras and Diwali festivals, prices for gold and silver are showing a steady decline. A sudden collapse in precious metal prices occurred on Tuesday, which intensified in the afternoon.
On Tuesday, the price of silver on the MCX exchange dropped to 1.75 lakh rupees per kilogram, while the price of gold fell below 1.38 lakh rupees per 10 grams. Silver recorded a drop of approximately 5%, and gold's dropped by 2%. For buyers before the holidays, this may present a favorable opportunity, as it is customary in the country to purchase gold and silver during Dhanteras, and prices have been decreasing over the last week.
It should be noted that gold has become cheaper by 53 thousand rupees per 10 grams compared to its January peak. In January, the price of gold reached 1.91 lakh rupees per 10 grams. The situation with silver proved more complex: in January, the price per kilogram on MCX reached 4.21 lakh rupees, whereas today it has fallen to 1.78 lakh rupees, approaching 2.43 lakh rupees per kilogram.
In recent weeks, significant declines in gold and silver prices have been observed in global markets (Comex and LBMA). This is linked to the strengthening of the dollar index and the yield on American bonds in global markets, shifting investment interest away from the considered safe gold towards other assets. Since gold does not generate interest, its attractiveness decreases amid rising yields.
At the international level, precious metals are under constant pressure, leading to price reductions in the domestic market as well. Furthermore, concerns regarding the tight monetary policy of the US central bank on interest rates have alerted commodity investors, intensifying selling pressure. In the case of silver, the sharp price drop is attributed to weak international industrial demand, particularly in the solar energy and manufacturing sectors, as well as signs of a global slowdown and sluggish demand from China, which has severely undermined the recovery of silver prices.
Following fluctuations in global stock markets, large investors and funds have actively taken profits on gold and silver, resulting in a substantial drop in prices.
The impact of the global slowdown is clearly visible in the Indian jewelry market. Despite the traditional enthusiasm for purchases remaining in Indian markets during Dhanteras and Diwali, this fall after high prices has surprised both buyers and investors.
Experts believe that this correction, occurring just before the festive season, could present a favorable opportunity for middle-class families and investors who have long planned to invest in gold and silver. Nevertheless, given the high volatility of the market, purchases are advised with great caution. The movement of gold and silver prices amid strong pressure and sell-offs in international markets is entirely dependent on global economic signals and the dollar exchange rate. Although festive demand is attempting to curb this decline, investor attention is now focused on upcoming global economic data.
