On Wednesday, the prices of gold and silver took a sharp dive, marking a significant break in their recent upward trends. On the MCX (Multi Commodity Exchange), both metals saw large declines early in the morning.
Gold opened higher but quickly fell, while silver opened with a noticeable drop. By 9:45 AM, the price of gold had dropped by ₹695, trading at ₹1,38,388 per 10 grams. Silver experienced an even more significant drop, falling by ₹4,197 to ₹2,54,614 per kilogram.
On the previous day, gold had closed at ₹1,39,083 per 10 grams, and opened Wednesday with a minor gain at ₹1,39,140. However, this uptick was short-lived, as prices started declining soon after the opening. Silver had closed the previous day at ₹2,58,811 per kilogram, and opened Wednesday lower at ₹2,57,599. The decline continued as the day progressed.
Global Market Trends
In the previous trading session, geopolitical tensions and global uncertainties had led to an increase in demand for safe-haven investments, which caused both metals to rise. Internationally, spot gold had surged nearly 3% in the last session, but has now fallen by 0.6% to $4,469.04 per ounce.
Market participants are now focused on upcoming U.S. payroll data, which will provide signals regarding the Federal Reserve’s interest rate direction.
Rising Market Uncertainty
Market unease has also been compounded by a series of global developments. U.S. President Biden has issued stern warnings to Colombia, Cuba, and Mexico regarding illegal drug shipments, adding to market nervousness. Meanwhile, after the arrest of Venezuelan President Nicolás Maduro, Swiss authorities reportedly froze his assets, which analysts believe could increase the flow of capital into gold and silver as safe investments.
How to Trade Gold and Silver?
According to Jiten Trivedi, an analyst at LKP Securities, the increasing geopolitical tensions are strengthening demand for gold, which is seen as a safe-haven asset in uncertain times. These developments, including U.S. actions against Venezuela and related alerts, are contributing to heightened global uncertainty, driving up demand for gold.
In the short term, gold prices are expected to remain volatile, with the potential to trade between ₹1,37,000 and ₹1,42,000 per 10 grams.
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