Gold and Silver Prices Plunge from Record Highs Experts Explain the Reasons Behind the Drop
The recent surge in precious metals has seen a significant downturn, with both gold and silver experiencing sharp declines. The Multi Commodity Exchange (MCX) reported notable drops as profit-taking actions were triggered by external market factors. These factors include a reduction in geopolitical tensions and easing of economic concerns.
Gold and Silver Prices Plummet
Gold prices of 24 karats, which reached a peak of ₹1,32,294 per 10 grams, fell approximately 3% to ₹1,25,957 per 10 grams. Similarly, silver prices suffered an even steeper decline of over 8%, dropping from ₹1,70,415 per kilogram to ₹1,53,929 per kilogram.
Experts Analyze the Market Shift
Market experts have termed this correction a healthy and anticipated response after weeks of extraordinary growth. Ajay Bagga, a banking and market expert, commented that Friday’s downturn represented a “necessary tactical retreat.” He identified President Donald Trump’s more conciliatory stance on tariffs with China as a key factor leading to the market pullback.
Bagga emphasized that despite this decline, the strategic value of gold and silver remains strong. Key long-term factors such as:
- Global de-dollarization
- Persistent supply deficits in silver
- Central bank accumulation
- Low real interest rates
- High geopolitical risks
These elements continue to support the long-term investment potential of precious metals.
Advice for Investors
Investors should view the current market correction as an opportunity to enhance long-term positions, according to Bagga. He noted that silver’s prospects are particularly strong due to its dual role as both a precious and industrial metal.
Echoing this sentiment, Ajay Kedia, Founder and Director of Kedia Commodities, expressed that the market drop was expected after an unparalleled rise over the preceding months. He noted a period of almost nine weeks marked by significant increases, making this correction seem overdue.
Future Outlook
While recent talks between the U.S. and China and peace discussions with Russia contributed to the market’s pullback, Kedia stressed that the long-term outlook remains positive. Investors should exercise caution, stating that silver’s volatility could still lead to substantial daily fluctuations, even with its doubling in value over the past year.
As the market stabilizes, investors are encouraged to consider purchasing gold and silver, especially during festive occasions like Dhanteras, while remembering the inherent risks associated with these assets.
