After touching record highs earlier this week, both gold and silver prices witnessed a sharp correction on Wednesday, according to the All India Sarafa Association. The decline was led by profit booking by investors, who chose to lock in gains after the steep rally in precious metals. Market experts also pointed to a softer trend in global precious metal markets, influenced by a stronger U.S. dollar and easing inflationary concerns, which reduced the immediate appeal of safe-haven assets.
Gold of 99.9% purity, which had hit an all-time high of ₹1,15,100 per 10 grams on Tuesday, slipped to ₹1,13,800 per 10 grams, down by ₹1,300 in the national capital. Similarly, silver prices, which had been climbing steadily on the back of both industrial demand and investor interest, dropped by ₹1,670 to ₹1,31,200 per kilogram. Analysts noted that while the correction may cause short-term volatility, the long-term outlook for gold and silver prices remains positive, supported by ongoing global uncertainties, festive season demand in India, and sustained industrial usage for silver.
Gold Prices Drop ₹1,300
Gold of 99.9% purity, which had scaled an all-time high of ₹1,15,100 per 10 grams on Tuesday, declined by ₹1,300 to ₹1,13,800 per 10 grams in Delhi on Wednesday. Traders attributed the sudden fall to a combination of global price corrections, reduced buying interest at record levels, and easing concerns over inflation.
Market analysts believe that while the long-term outlook for gold remains strong due to global economic uncertainties, short-term fluctuations are likely as investors lock in profits.
Silver Slips by ₹1,670
Silver also joined the downward trend. After hitting record highs on Tuesday, prices fell by ₹1,670 to ₹1,31,200 per kilogram on Wednesday. Silver had gained significantly in the past few weeks, driven by both industrial demand and safe-haven buying, but experts note that the recent surge had made the metal vulnerable to a correction.
Reasons Behind the Decline
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- Profit Booking: Many traders and investors chose to book profits after the steep rally in precious metals.
- Global Market Cues: International gold and silver prices showed signs of cooling, influencing local markets.
- Stronger U.S. Dollar: A firmer dollar typically puts pressure on precious metal prices globally.
- Easing Inflation Concerns: Declining inflation data has reduced safe-haven demand for metals like gold and silver.
Impact on Investors
For retail investors, the correction provides a possible buying opportunity before the festive and wedding season in India, which traditionally boosts demand for gold and silver. However, experts advise caution, as further corrections cannot be ruled out if global cues remain weak.
Long-term investors are still bullish, citing gold’s role as a hedge against inflation and geopolitical risks, while silver continues to attract interest due to its dual role as a precious and industrial metal.
Market Outlook
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- Analysts suggest that gold may continue trading in the ₹1,12,500 – ₹1,15,000 per 10 grams range in the near term.
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- Silver is expected to remain volatile, with prices likely fluctuating between ₹1,29,500 – ₹1,32,000 per kilogram.
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- Global central bank decisions, particularly by the U.S. Federal Reserve, and movements in the U.S. dollar index will be key triggers to watch.
Summary
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- Gold prices fell by ₹1,300 to ₹1,13,800 per 10 grams after reaching a record high of ₹1,15,100.
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- Silver prices slipped by ₹1,670 to ₹1,31,200 per kg.
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- The dip is attributed to profit booking, global cues, and easing inflation fears.
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- Analysts suggest the correction may be short-lived, with festive demand expected to revive prices.
In conclusion, the recent dip in gold and silver prices reflects natural market corrections after record-breaking highs, driven largely by profit booking and shifting global cues. While short-term volatility may continue, experts believe that both metals retain their long-term appeal as safe-haven assets and investment hedges. With the festive season ahead and sustained industrial demand, analysts expect gold and silver prices to remain resilient, offering investors opportunities to re-enter at more attractive levels.
Disclaimer: This article is for informational purposes only. EQMint assumes no responsibility for investment decisions made based on this content. Readers are advised to consult financial experts before making any investment moves.
References:
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- All India Sarafa Association Market Data
