Mumbai: In a dramatic turn of events, gold and silver prices witnessed a sharp decline in the Indian markets on Thursday, leaving investors and market watchers stunned.
Gold prices dropped by ₹3,500 per 10 grams, while silver saw an even steeper fall of ₹9,000 per kilogram, bringing it down to ₹2.37 lakh per kg in the Delhi bullion market.
This unexpected crash comes after a period of significant gains in precious metals, raising questions about the factors driving this sudden reversal. According to market experts, the interplay between rising oil prices and a strengthening US dollar is a key factor. Higher oil prices have stoked inflation fears, leading to expectations of increased interest rates. Since gold is a non-yielding asset, higher rates make it less attractive compared to bonds, triggering a sell-off.
Adding to the pressure, global geopolitical tensions, which typically boost gold’s safe-haven appeal, have failed to provide support this time. Instead, broader financial factors, including a volatile stock market and foreign investor sell-offs, have taken centre stage. The Sensex also tumbled by 1,500 points on Thursday, reflecting the overall market uncertainty.
The crash has also impacted gold and silver ETFs, with their valuations plummeting in tandem with bullion prices. Analysts note that the decline highlights the sensitivity of ETFs to market sentiment and demand-supply dynamics.
For investors, this sharp correction serves as a reminder of the volatility in precious metals. While some see this as a buying opportunity, others are adopting a wait-and-watch approach, wary of further declines.