Gold Dips Below ₹1.5 Lakh, Silver Plunges ₹20,000 in Two-Day Selloff
Precious metals witnessed a sharp correction on the MCX, with gold prices falling by ₹7,000 per 10 grams and silver crashing by ₹20,000 per kg over just two days. The selloff is driven by a surging US dollar and concerns over the US Federal Reserve’s stance on inflation.
Key takeaways
- Gold prices have fallen by ₹7,000 per 10 grams over a two-day period on the MCX.
- Silver prices witnessed a sharper decline, losing ₹20,000 per kg in the same timeframe.
- The price crash is largely due to a strong US dollar and the US Federal Reserve's stance on inflation.
- Retail investors should prepare for continued volatility as global economic factors remain uncertain.
Precious metals witnessed a sharp correction on the MCX, with gold prices falling by ₹7,000 per 10 grams and silver crashing by ₹20,000 per kg over just two days. The selloff is driven by a surging US dollar and concerns over the US Federal Reserve’s stance on inflation.
Indian investors in precious metals faced a turbulent 48 hours as prices for both gold and silver corrected sharply on the Multi Commodity Exchange (MCX). The downward trend intensified on Friday, pushing gold prices below the significant ₹1.50 lakh mark per 10 grams, a level that had previously acted as a psychological support for the market.
The Scale of the Correction
On Friday alone, gold futures dropped by ₹2,269, settling around ₹1.49 lakh per 10 grams. This single-day decline contributed to a massive two-day slump totaling ₹7,000. Silver followed a similar, albeit more aggressive, trajectory. Silver futures fell by 2.3% on Friday to reach ₹2.32 lakh per kg. When combined with the previous day's losses, silver has seen a staggering ₹20,000 per kg wiped off its value in just two trading sessions.
Global Triggers for the Price Drop
The primary drivers for this correction are international. A stronger US dollar has made dollar-denominated assets like gold more expensive for holders of other currencies, naturally dampening demand. Furthermore, the US Federal Reserve’s 'hawkish' stance—suggesting that interest rates may remain higher for longer to combat inflation—has reduced the appeal of gold. Since gold does not pay interest, it often loses favor among investors when interest rates are high or rising.
Impact on Indian Retail Investors
For Indian households, where gold is often viewed as a primary store of wealth, this sudden volatility is significant. While the price drop may cause temporary concern for existing investors, it also presents a potential entry point for those who were waiting for a cooling-off period before making new purchases. Markets remain sensitive to global economic data, and further volatility is expected as investors digest upcoming US inflation figures.
Investment in precious metals involves market risk; this report is for informational purposes and does not constitute financial advice.
Frequently asked questions
Why did gold and silver prices crash suddenly?
The decline was primarily caused by a stronger US dollar and the US Federal Reserve indicating that interest rates might stay high to fight inflation, which makes non-yielding assets like gold less attractive.
How much value did gold and silver lose in the last two days?
Gold lost ₹7,000 per 10 grams, while silver saw a much larger drop of ₹20,000 per kilogram over the two-day period.
Is this a good time to buy gold or silver?
While the correction makes entry prices lower than before, the market is currently volatile; investors should assess their long-term goals and perhaps buy in smaller tranches.