Gold drops over Rs 3,400, silver cheaper by Rs 11,000: Is it time to invest?

The first trading day of the week saw a sharp decline in the prices of gold and silver on the Multi Commodity Exchange (MCX). Gold was down Rs 3,466, or 2.19%, at the time of writing, trading at about Rs 1,55,000 per 10 kilos. The price of silver dropped by Rs 11,434, or 4.41%, to approximately Rs 2,47,348 per kilogram.

According to Gaurav Garg, Research Analyst at Lemonn Markets Desk, global factors are playing a major role in the current price movement.

“Gold and silver prices in India saw a decline today, with gold trading at Rs 1,48,614 per 10 grams and silver at Rs 2,35,573 per kg, reflecting international prices of $5003.95 per ounce and $79.32 per ounce, respectively,” Garg said.

He added that the drop in prices is mainly linked to rising crude oil prices.

“The fall in precious metals is largely attributed to rising crude oil prices, which surged to $100.15 per barrel, raising inflation fears and dampening expectations of a rate cut by the US Federal Reserve,” he explained.

In recent trading sessions, silver has experienced particularly severe corrections. The MCX price of silver was Rs 2,82,644 per kilogram on February 27. The price has decreased by Rs 31,898 in just 11 trade days. 

Many investors are surprised by this fall because precious metals often climb in times of economic instability or geopolitical turmoil. On January 29, silver hit a record high of Rs 4,20,048 per kilogram. Prices have been steadily declining since then, and they are currently less than Rs 1,69,000 per kilogram from that peak.

Investors should refrain from making rash judgments during such tumultuous times, according to market analysts. Commodities frequently experience short-term corrections, particularly when there are conflicting signals from the world economy.