Silver, gold prices plummet amid aggressive profit booking

MUMBAI — Gold and silver prices saw a meltdown this week, amid dollar strengthening and aggressive profit booking from investors after an unprecedented rally in metal.

MCX gold February futures dipped 9 per cent while MCX silver March futures slid down 25 per cent on Friday. Currently gold futures stand at INR 1,49,075, while silver futures at INR 2,91,922 per kg.

The price of 10 gram 24-carat gold was at INR 1,65,795 down from INR 1,75,340 of previous day's close, according to data published by the India Bullion and Jewellers Association (IBJA).

Also read: Gold, silver prices dip after aggressive profit booking from record levels

The bearishness in precious metals came as US President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair which fuelled a recovery in the US dollar.

Analysts said Warsh would be less supportive of lower interest rates due to his hawkish stance on inflation control and emphasis on Fed independence, which prompted selling among precious-metals traders.

"US dollar strengthened, real yields rose and leveraged positions in gold and silver viewed as overextended debasement hedges unwound swiftly. This resulted in violent liquidation, erasing billions in market value and flushing out weak hands in a classic euphoria-to-exhaustion phase rather than signalling a structural bear market reversal," analysts noted.

However, they maintained that structural supply deficits and industrial demand continue to underpin the bullish bias. "Relentless central bank gold accumulation, silver's structural supply deficits amid surging industrial demand from green energy, EVs, AI and electronics" support the long-term positive outlook, they said.

According to market watchers, the correction served as a healthy reset purging excess leverage, speculative froth, and overbought conditions positioning the market for more sustainable upside once sentiment stabilises.