A sudden and significant decrease in the prices of gold and silver has been observed. In the multi-commodity market, the prices of these metals fell to approximately 2500 rupees. Furthermore, there was a drop in the prices of gold and silver in the precious metals market, as well as changes in the value of these metals on the international market.
On the MCX exchange, the silver futures contract dropped to 236,417 rupees per kilogram at 8:00 PM on Thursday, showing a decline of 4000 rupees during the day. As for gold, it decreased by 1600 rupees, reaching the mark of 151,052 rupees. This fall in gold and silver prices occurred suddenly in the evening.
According to data from the IBJA website, the price for 10 grams of 24-carat gold was 152,016 rupees, which was 200 rupees lower than morning figures. The price of 22-carat gold decreased by approximately 250 rupees to 139,247 rupees, and the price of 18-carat gold reduced by 190 rupees, reaching 114,012 rupees for 10 grams. The cost of silver in this market decreased by approximately 3000 rupees to 232,766 rupees.
On COMEX, gold is trading down by more than 1 percent, reaching $4,330.30 per ounce. Silver, in turn, has fallen by approximately 1.80 percent and is at the level of $65.365 per ounce.
Several factors explain the sharp price drop. Firstly, the strengthening of the US dollar, which reached a two-month high. When the dollar becomes stronger, gold bought in dollars becomes more expensive for foreign investors, creating downward pressure on demand.
Secondly, the decision by the US Federal Reserve to raise the rate by 25 basis points last week, bringing it to 3.75%-4%. Statements from Fed officials have increased the probability of further rate hikes, making interest-bearing assets more attractive to investors.
Thirdly, pressure on US bond yields. High interest rates and yields may prompt investors to be more interested in safe, yet income-generating American bonds. This has also put pressure on silver.
The fourth factor is a slight decrease in safe-haven demand. News about negotiations between the US and Iran created hope for a reduction in geopolitical tension, leading some investors to reduce purchases of gold as a safe asset. However, this influence proved to be smaller or mixed compared to the impact of the dollar and the Fed.
Finally, after a recent rise, some investors realized profits at high levels, which increased short-term pressure on gold and silver.