Precious metals markets reeled this week from a brutal sell-off, with gold slumping 9% and silver cratering up to 25% on MCX. Profit booking intensified as the US dollar roared higher, prompting investors to cash in on recent rallies.
February gold contracts on MCX ended at 1,49,075 rupees for 10 grams, while March silver futures hit 2,91,922 rupees per kg. In physical markets, IBJA reported 24-carat gold at 1,65,795 rupees per 10 grams, down sharply from 1,75,340 rupees.
Trump’s pick of inflation hawk Kevin Warsh for Fed Chair fueled dollar strength, reversing safe-haven flows into bullion. Traders dumped leveraged bets built during dollar weakness, with real yields climbing and sparking panic selling.
‘We’ve seen a classic unwind of crowded trades, vaporizing weak hands and market cap worth billions,’ analysts explained. This isn’t the dawn of a prolonged slump but a fatigue signal after rapid gains.
Fundamentals, however, stay robust. Ongoing central bank gold hoarding and silver’s supply crunch—driven by solar panels, EVs, AI tech, and gadgets—support higher prices over time. Experts view the correction as essential, weeding out excess speculation for steadier upward momentum.
Silver could rebound from 3-3.10 lakh levels, analysts predict, targeting 3.40-3.50 lakh per kg. Investors should brace for swings but bet on enduring tailwinds in these metals.